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Got the Cable - Now What?
By this point in time you should have, by some means, acquired your crossover cable. Simply plug this into the Ethernet (Internet) jack on each computer. You may run into trouble if your computer only has one Ethernet jack, as this will take up the internet port and you will not be able to plug into your Internet (assuming you use a wired connection). If you run into this problem, you can always install an additional ethernet expansion card in a PCI slot on your computer. As a side note, I highly recommend wrapping a piece of tape around your crossover cable and labeling it "crossover", to avoid any mixup down the line.
Once you have the cable plugged in you need to make sure of a couple of things. The "Local Area Connection"s on each computer need to be enabled. We will be doing some custom settings on each of these later on, but for now, they just need to be enabled. To do this go to Start -> Control Panel -> Network Connections -> Right Click Local Area Connection -> Select Enable.
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Windows IP Settings
We use IP (Internet Protocol) addresses to let two different connections know that they are related. Think of it like a virtual neighborhood. If we give one computer an address on Spain St, and the other computer an address on Vermont Ave, the computers will know that they do not lie on the same path. However, if we were to give them both an address on Manteca Dr, we know that they will communicate because they're on the same street. Find further reading on IP Addresses, how they work and what they look like. IP addresses are of course, different from a street name and house number, so I'll just tell you what to fill in for simplicities sake.
Go to your Control Panel and select Network Connections. Right click your Local Area Connection and select "Properties". Highlight "Internet Protocol (TCP/IP)" and click Properties. On the General tab select "Use the Following IP Address". Enter these settings on the first computer:
IP Address: 10.0.0.100
Subnet Mask: 255.0.0.0
Default Gateway: Leave Blank
Enter these settings on the second computer:
IP Address: 10.0.0.101
Subnet Mask: 255.0.0.0
Default Gateway: Leave Blank
Once you have done that you can "OK" out of the windows.
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Network Connection Wizard
The easiest way to setup Windows computers to share with each other is to simply run the Network Connection Wizard. This will streamline the process of putting your computers in the same workgroup and configuring the windows firewall to allow the connection.
Go to Control Panel -> Network Connections. On the left side of the screen you should see an option to "Set up a Home or Small Office Network". Clicking on this starts the wizard. Here are step by step instructions to configure the Wizard, starting with the first screen.
1. Click "Next".
2. Click "Next" again.
3. Leave the second option selected and click "Next".
4. Enter a computer name and description of your choice. This setting may already be configured to your liking, and you can simply click "Next".
5. Likely in this place it says "HOME", "MSHOME", or "WINDOWS". Change this to something appropriate to you, that makes sense and that you can remember.
6. Leave File and Printer sharing enabled (first choice) and click "Next".
7. Click "Next" to confirm the settings.
8. Assuming both computers are running the same Operating System, you can select the option not to create a Network Setup CD and select "Finish".
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A logical person would conclude that, since you've gone through all these steps that seemingly indicate you're good to go, that everything is going to work just fine. Windows, at least in this case, isn't logical. If you just want to share a few files between the computers, then you're going to have to select each folder and enable permissions in such a way that anyone will be able to read them. When you do this your computer *should* be able to discover the other, and find its "shared" files through My Network Places. You may need to go through a well-timed reboot on each one in order to get those settings working correctly, however.
Alternatively, you can give your computers permanent permission to talk to one another about anything by using User Accounts. Likely you already have user accounts set up on your computers, like "Nancy", "Joe", "Kids", what-have-you. The trick is to create an account on each computer that has the same name, same permission level (Administrator, User, etc), and same password. (It is not recommended that you leave the password blank). When you login to one of these accounts on one of your computers, then go to My Network Places, you will be able to freely access the other computer that shares that account and credentials. It will (logically) see it how it is: You logging in, just through another computer.
Setting up Windows to Directly Connect Two Computers
In this day and age the ability to share information as fast as possible is of the utmost importance. What faster way than to use a simple cable and a few Windows settings to be able to transmit data at the blazing speed of 1 Gigabit per second?