On a forum, I decided to reply to a user about the ability to network two computers together in Ubuntu Linux. I decided to put the text of my response here because I think it’s very useful.
You have stumbled upon the most difficult to use facet of Linux. You have been indoctrinated that things are easier in Windows. Windows considered it a privilege to share an internet connection(some versions of Windows put restrictions on how you share an internet connection). Linux has so many different options, all you need to do is pick your poison.
How are you sharing the connection right now? I will tell you how I have shared my internet connection in the past using Ubuntu.
1) I have been connected on a USB GPRS modem to the internet under Ubuntu and shared my internet connection over a crossover ethernet cable. I merely set the default route to my modem on Ubuntu. I set up static ip addresses on both computers and on the 2nd computer I made sure it used as a the gateway the IP of the first computer, but later I found out this wasnt even needed.
2) When wireless was down in our office, I plugged an Ethernet cable into my notebook to access the net. My computer became a wireless access point. Unfortunately, no one could configure their Windows computers to access it, but my buddy using a Mac could access it.
3) In another school, we used a Linux server to be a proxy. It had two LAN cards. One LAN connected to the internet and the other LAN card connected to our internal network. It used a Squid Proxy server for all traffic.
Lots of options and they all work great.