Limited or No Connectivity usually means that the
PC has been unable to get an IP address from the DHCP server, and has been allocated a default 169.254.x.x one by Windows, or an incorrect IP address has been entered manually.
To create a wired network for Internet access and File/Printer sharing, you have essentially two options:
1) Install a Network Adapter in each PC (if not already installed) and connect them directly with a crossover CAT5 ethernet cable. “Internet Connection Sharing” is then enabled on the actual Internet connection in the “host” PC and the “client” PC will have Internet access provided the “host” is running and online.
When you enable “Internet Connection Sharing” on the Internet connection in the “host” PC, it automatically configures the Local Area Connection with the IP address 192.168.0.1 and subnet mask 255.255.255.0. If you run the Zone Alarm firewall in your “host” PC, the Internet Zone Security level must be reduced from High to Medium or “ICS” traffic will be blocked. The “client” PC’s Local Area Connection should be set to get its IP address automatically, which it does by DHCP from the “host”.
2) The preferred option for connecting more than one computer is to use a broadband Router and, with ADSL, this should be a combined “Router/ADSL Modem”. All networked computers connect directly to the router with ‘straight-wired’ CAT5 ethernet cables.
With a router, it is the router which connects directly to the ISP and not one of the connected PCs. The router in turn allocates the IP addresses to the PCs, using one of the address ranges reserved for Local Area Networks, usually 192.168.xxx.xxx
Either of these options will additionally allow you to run File and/or Printer Sharing across the network.
If you are running software firewalls, the IP addresses of the networked PCs must be put into its "trusted" area to allow them to communicate with one another.