What kind of setup do you have?
From your post I would guess you have a PC with NIC&non-cable modem and laptop with NIC only. Is that the case?
I have similar setup and after a lot of experiments I gave up the idea of sharing the dial-up connection. It's too slow and unreliable. So I got: cable modem->DI703 router->computers. Routers are dirt cheap now (look in Hot Deals forum) so this set-up is not as expensive as it looks. Works great. And since routers usually come with at least 4-port built-in switch, you'll be able to invite your friends for a LAN party