IP Address on a local network

I'm interested to find this out as well. I have a 4-port modem/router which assigns the local IP addresses automatically, but we have loads of problems with it and I'd like a better understanding.

Your downstairs PC is connected to the Internet with a real IP and in the same time it afford Internet for your upstairs PC. So Internet Connection Sharing (ICS) must be already enabled on the downstairs PC. In that case your downstairs PC will act like a DHCP and starts to give IP address automatically ranging from 192.168.0.1 to 192.168.0.254.
The 192.168.0.1 is reserved for the Network card of your downstairs PC and your upstairs PC must have 192.168.0.2 as IP
You don't need to do anything, ICS will do the work for you.

I think he's asking how can someone connect directly to the 2nd computer, without him connecting first. As in, if he wanted to run a server, how would people be able to reach it.

I myself have no clue. If you were using a router I could tell you to configure port forwarding to get the job done. It sounds like you're using ICS though, and although you may be able to configure similar functionality out of it, most MS products aren't really known for having a lot of features so I wouldn't hold my breath either. On the other hand, I'm sure there's a way.

What exactly are you trying to do?

Then again, if I'm looking at this from the wrong angle, then Cyanure is right, ICS handles all the routing and you don't have to do a thing.

Thanks for your answer Cyanure.

But let's suppose this situation:

Upstairs PC has a server running, are you saying that in order to connect to that server, the client (outside of my local network) has to use the IP of my downstairs PC and the ICS will automatically direct it to any server on the network?

No
It's a different situation.
ICS permits the internal PCs to connect to websites but it doesn't permit a client from outside your network to connect to your internal PC.
The solution is NAT (Network Address Translation) that allows you to redirect a particular port from the router to a particular port on a particular computer on the internal network.
If you will run on the upstairs computer a Web server for example, you just tell your router to refer any incoming communications on the router's port 80 to port 80 on 192.168.0.2 (IP of your upstairs PC).

ah, I see... I can only run servers on one computer at a time, right?


But I don't have a router, as one connects directly through the other and the other connects to the cable modem. Is a router a must for this kind of directioning?

No, you do not need a router.
You just need to run Windows Advanced Server on the computer that connects directly to the internet. Windows Advanced Server has a built in NAT.
If you wanna know details and how to redirect request on port 80 to an internal PC, I'll be happy to help you.

Is Windows Advanced Server by default on WinXP Pro or do I have to download it?

You need to install the Active Directory from which you'll use Remote and Routing Access Service to install the built-in NAT software. Active Directory is only available on 2000 and 2003 Server family.
If you wanna use Windows XP, you'll need to use a NAT Router hardware.

thanks for the facts cyanure!