i just (re)set this up again today but using a cable modem and win2k rc2 so here goes:
set your nic at 192.168.0.10,sub255.255.255.0
no gateway, but add your isp's dns servers.
on your dial up connect set it to whatever you want then (you'll see why in a sec) turn on sharing, this will cause ICS to change your settings to 192.168.0.1, 255.255.255.0, then go back and change it to your real settings (that you got by running winipcfg earlier and wrote down somewhere ;-)..set ip,sub,gate and dns.(maybe need a domain suffix too depending on your isp), now go back and remove the last zero from your nic cards ip (192.168.0.1)..probably have to restart now too. On the second machine, change your nic config to obtain an address atuomagically and add the address 192.168.0.1 as your gateway..that should be it..(after the resart)
good luck..i had to restart a few times cuz rc2 is still sorta buggy with network stuff