error 777 in ME/XP network

Hi,
(I'm never sure if I should start a new post or continue
the thread to my previous question - the newsgroups are
excellent but difficult to navigate around. Many thanks to
Steve Winograd and Carey Holzman for previous, much
appreciated, help.) Network is almost there - but cannot
use ICS owing to error 777

"Connection attempt failed because the modem (or other
connecting device) on the remote computer is out of order".

This message appears on the client (XP) computer - but, as
far as I can work it out, the devices on the host (ME)
computer are working well?
Network consists of two PCs directly connected by a
crossover cable (Sorry, Carey, I'd bought the stuff before
I read your pages)
All advice gratefully received.
Best wishes and all stregth to the group, ph