I think you can use USB but probably via a hub -- direct link USB cables though available can cause problems. What I don't know is how.
Windows Help suggests using a COM or Parallel port which is very slow (and missing from many new computers).
Or a network -- the quickest solution is an ethernet network cable (crossover version) between the networking ports of the two computers and just run the Windows networking wizard. Make sure you turn off firewalls on both machines which setting it up.
THIS IS FROM WINDOWS HELP TOPICS
"Connecting Your Computers
For the best experience using the Files and Settings Transfer Wizard, you will want to connect your two computers together. You can connect your computers either by using a null modem serial cable or by using Home networking.
Connecting With A Serial Cable
The easiest way to connect your computers is to use the null modem serial cable. To use the null modem serial cable:
Both computers must have an available serial port (also called a COM port).
You must have a null modem serial cable (also called a LapLink serial cable or a serial file transfer cable).
The serial cable must be long enough to connect the computers together.
Click here for additional information about connecting your computers using a null modem serial cable.
Connecting With Home Networking
The best way to connect your computers together is to use Home networking. Although the setup is more complex, your files and settings will transfer faster. If you are planning to keep both your old computer and your new computer, you might want to consider creating a Home network.
To use Home networking:
Both computers must have a network interface card or a USB network interface installed. The jack looks like a slightly larger telephone jack.
You must have network cable, and in most cases a hub.
The network cable must be long enough to connect the computers together.
Note: A wireless network will not need network cable or a hub.
Run the Network Setup Wizard to set up your Home network.
Make a direct network connection by using a DirectParallel cable"
fihart is dead on about the problems, and that is because you need a "crossover" cable to connect two like devices. The same thing applies to networking and it is a very easy concept.
USB has 4 pins(usb 3 has more) 1 is power and 4 is ground, but 2 and 3 are for data. I believe 2 is send and 3 is receive, now if you take a standard usb and connect 2 computer, one computer will send data down pin 2 at the same time, therefore, no data is coming in on the 3rd pin and the other computer is not receiving any data( there is just lots of collisions on pin 2). When a cable is a "crossover" the send and receive pins are swapped, and in the case of usb, pin 2 on one end comes out on pin 3 on the other end of the cable. This way when one computer sends data down pin 2, it is received on the other end of the cable on pin 3( the receive pin) and the data gets to the other computer.
Not sure how good I explained it, but just do some googling on crossover cables and you will probably find a better explanation.
But yes you can connect 2 computers directly with just a USB cable(crossover though). You can also use a crossover ethernet cable, which would be much easier to find.