I have 2 computers running on XP home and I have an internet broadband connection, I want to connect both computers to this connection as my first PC is already connected with DSL modem. Also I want to share my hard drives so I can access files on any of them. Please help me to setup this and with the stuffs required, I'd like to know how to setup these connections through wireless and as well as cables with complete settings and installations from starting till end.
Thanks.

Do I seriously require Router or just LAN Cards will work out to setup 2 connections ?

First you need at least one cable per computer, and the router has to have more than one port. Once you have figured that out, if you have more than one port, connect 'em to the router. After that I recommend that you run the Network Setup Wizard on both computers and give them different network names. Once that is done (if you chose to allow files to be shared) right-click on the hard drive or folder you want to share and click Sharing and Security. Choose to share the drive with any name you want, which the C:\ drive might already be shared, and adjust the settings to fit your preference. You should be ready to transfer files when done (if done correctly). You may have to restart your computer when done.

Like jham said, you need to purchase a broadband router, something like D-link, Linksys, Netgear, etc.

Choose one that includes a 4-port switch. With this router, you connect the dsl modem to the "WAN" port of the router. Your other computers connect to the LAN side, using standard ethernet Cat. 5 cables.

Now the router will route data packets to each computer accessing the internet, or each other's shares.

To use wireless, you need to purchase a wireless broadband router, again d-link, Linksys, etc.

Then you need a wireless network adapter. It can be an internal one, using a PCI slot, or an external one, using USB.

Wireless is more complex to setup, follow the instruction manual.