I havent seen a home router used for print sharing but it does make sense as its done that way in an office environment.

Are the computers in the same domain or workgroup and can you map to the drives of the other through Tools, Map Network Drive?

Having said all of the above, my neighbour had some problems networking 98 and XP and was going to let me know if he succeeded. I dont think he did and instead upgraded to XP on both.

I would try Windows XP Pro as I dont know of anyone who has networked Home. It may be possible but I havent seen it done.

The rest of the set up sounds fine with the router and the LAN though.