Setting up a wifi network for Mac and PC?

My recommendation would be to go directly to buying a wireless access point and hook it up directly to your cable modem. You can buy a pretty decent 802.11g access point for your system for under $60 (for example: this Netgear unit from Amazon).

You can also experiment with setting up what Mac folk call a computer to computer network, as detailed in an excellent Apple tech note, Setting Up a Computer to Computer Network.

If you want to save reading that document, simply launch Network from the "System Preferences" menu (it's off the Apple menu, but I'm sure you already knew that!) Now choose "Airport" from the Show menu at the top, and then choose "Show airport status in menu bar."

Now, on your menu bar, you'll see a little airport icon. Click on it, and you'll see something like this:

Choose "Create Network..." under the Computer to Computer area and you'll be able to quickly configure an open public network:

If that's all you want to do, name it, click "OK" and go find it on your new Windows XP system.

If you want to add a password (which I recommend), click on "Show Options" first, which produces the following set of choices:

To start out, I suggest a simple, easily remembered password. Once you have everything connected properly, you can change the password to something more complicated that neighbors and others aren't likely to guess.

One way or another, this will let you experiment with using your Mac simultaneously as a connected node to your cable modem and a wireless access point. I still recommend the separate piece of hardware, however, so that you can, for example, turn off your Mac and still access the net from the PC.

Either way, good luck with this configuration!