Network Cable Disconnected - oh no it isn't!

I am trying to network two PCs, one 98SE and one XP, using an Ethernet card in each and a CAT5 cable. The drivers installed OK on both PCs and 'system' indicates they are working OK. However when I go onto the XP PC to use the network setup wizard, I am co
nfronted immediately with a message that the network cable is not connected and the network icon confirms that with a big red X though it, yet the cable is plugged in. I have checked the cable on another network and it is OK. Should I be using a hub even f
or just 2 PCs? Help!