That sounds nearly identical to my home setup (netgear wireless router and all), so I'll try to help you out...
If you want to be able to transfer files and such between the machines, you need to set up shares on the xp box. So, you make a new folder (or choose an existing one), right click on that folder and select properties (I think; I'm not near my xp box), and go to the sharing tab. The process is something like that to create a directory that can be seen over the network.
Also, you have to go into the network (or network connections, I think) control panel in xp, and there should be an option to create a new network. The wizard will walk you through the steps, but when you get to the point where you have to name the workgroup, it should be the same on both the xp box and your mac... (the workgroup name is "WORKGROUP" by default on the mac, but you can change the name to whatever you want in the Directory Access app in the utilities folder... just select SMB and click the configure button). They don't have to be the same in order to access the other machine, but it makes everything a lot easier.
On your mac, make sure that Windows Sharing is checked in the Sharing preference pane.
I think that should be it (there may be a few obscure details on the windows end, but since I'm not at my xp box right now, I can't recall them), but if you have any other questions, I'll try to help out.
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