Xp pro and home can certainly be networked but that's not the question here, the question is they are not sharing one DSL/Cable Modem via the wireless router. If they can see each other, normally things should've worked automatically. It seems like the router may not be giving access to the other computer.
Normally on most home based routers you can reset them and they will go to default settings, usually resolves this kind of problem if something specific is configured that's not allowing the other computer to access the internet. For example, MAC Address restriction may be applied to the router so the router will only give access to one MAC address, I.E., one computer. So first thing I'd do, since I don't know anything about that specific router and it's config, reset the router and let it go on default settings.