I have succesfully networked an ME with my XP. I created user accounts with blank passwords on both machines. I also switched on the guest account at the XP. The XP has to be the host computer. Furthermore, you need to give sharing rights to the documents and files you want to be able to access on both machines. Just right click on the folders like "My Documents" for example and fiddle with the sharing rights. These can have passwords to open up in the network. It won't affect your networking. Also switch off the firewall on the XP and Zone Alarm firewall if you've got it. Zonealarm blocks any machine that tries to log on to your machine. Also, don't have dynamic addresses for your machines. Go to control panel on the 98 machine then click on networks. Then click on Configuration. Then Scroll down and click on any of the TCP/IP lines. Then click on IP address.
Fill in any number you want. The point is to givew a permanent number which the hosting XP can pinpoint. For the subnet mask, I would suggest 255.255.255.0
Then do the same for the XP machine . Then go the MSDOS mode and try to ping your 98 machine's static IP address from your XP. It should work.
email me if you have any questions. Right now I'm to figure out how to share my XP's modem with the ME.
adios,
Wame