I have purchased a new laptop and I'm wanting to transfer my old laptop files to my new one. How to I set the two up to network with each other. Window xp platform

There are a couple of options for you to proceed.
1. Use a hub or switch to create a P2P network. Networks 101: Peer-To-Peer Networks (http://www.techsoup.org/learningcenter/networks/page4772.cfm)
You can probably find free or low cost hubs at local thrift stores.
2. Use a product like PC Mover Laplink® Software - PCmover - Overview (http://www.laplink.com/pcmover/)
3. Copy files to a USB Flash Drive or External Hard Drive
4. Sign up for iBackup and run a backup of all your important files and then restre to your new laptop.
https://www.ibackup.com/ibprof/jsp/ibpr_signup.jsp?id=gianpiero_rondinelli

Probably the fastest way is to use a crossover cable or hub and set the network configuratiosn properly on the laptops :)