Phone-Line Network Problems

I have two computers that I used to have networked together using a phoneline network, sharing one dial-up modem connection and one printer. I upgraded one of the systems to WinXP (Home Edition). It recognized the NIC without any trouble and I went through its instructions for setting up a small home network. After completing that the system instructed me to take the WinXP CD to the other (Win98SE) machine and run "other programs" from the CD and click on set up small home network. I did this and everything seemed to work fine until it told me to reboot. It rebooted directly to a set-up dialog box that instructed me to turn on all printers and connect to the Internet. How do I connect to the Internet when windows has yet to finish booting (no start menu, no desktop icons, nothing). Anyway I let the thing finish setting up and the network seems to connect, but now whenever I try to connect to the internet my modem doesn't work. It keeps saying it can't find a dial tone. I've checked all the wiring and can hear the dial tone on the connected phone. What am I doing wrong, and how do I get Internet connection sharing to work again?