Boofhead,
You can connect two computers together directly, using an RJ45 Ethernet cable.
HOWEVER, you must either use a cross-over cable or 2 straight-through cables with a cross-over adapter in the middle.
The reason is simple - the cross-over cable allows you to connect the transmit pair on PC 1 with the receive pair on PC2, and vice-versa (TX-RX). Otherwise you just get TX-TX and RX-RX, which gives you the problem you have.
Alternatively, you can use an ethernet hub (old, but perfectly acceptable for what you want to do) or switch.
SD