Assuming both machines have a network card, all you should need is a crossover cable, if both machines are running XP it will be as simple as running the network wizard, if you have different versions of windows on each computer, good luck!
  I never did get XP and ME to network successfully, but soon as I got the new machine and transfered my other XP machine to the wife, it was no problem.
  You just set one machine to connect to the internet, allowing other computers to share the connection, and on the other machine you set it to connect through another computer on the network.

I know that they're a little more expensive but I highly recomend wireless networking. When my Dad and I were setting up the network from my computer to the basement router, we ended up having to go up a wall, through the attic, down a cold air vent, and accross the basement. Believe it or not that was the easiest way to do it. Took us nearly six hours.
Routers are the best for simple home networking, hubs are more for multi- connections for other devices as well as hooking up large numbers of computers to a server. I've never seen networking switches that use standard Cat-5 but even if they did have them, it seems like a pain in the butt having to switch over each time.

Gents:

Thanks for the tip. I have WIN98SE in both computers. The reason I did not go wireless is because (1) Time Warner Cable supplied me with a cable modem at no cost. Further, the computers are just next door to each other. As the crow flies its but about ten feet but due to aesthetics, I'll run the Cat5 cable up and over the ceiling (easy access). I already have a NIC in one computer so all I need is another 10/100dBase NIC. A Linksys router cost about forty bucks. I already have a four port switch but I was told that if use a switch I would be charged extra for the cable service however, using a router I would not be charged extra. It was explained to me why but I don't understand clearly. Can you shed a light on this?

Hogans Alley