When worse comes to worse, it is sometimes better to admit that you have failed badly, go back to the drawing board and start all over again from scratch. At least for me, it is very hard to admit that you have been wrong or that you have not been able to solve a problem using brute intellect. After more than four days trying to get my home network up and running, being creative on just about every imaginable dimension of insight, that is exactly what I decided to do. It was either that or jump out of the window.
Choosing for life (even though the window is only on the second floor and I probably would not have injured myself too badly except for at most a broken ankle), I gave up, turned away from the tempting window, walked gently towards the computer that would not work, put down the axe I was about to use on it, paused and took a deep breath of surrender. It felt good to surrender somehow. I gave up and decided to reinstall Windows 98SE on my other computer which wasn't working.
You will not believe it, but that was the answer to my problems! All of a sudden my home network was fine and both the computers could communicate with each other via a hub as well as access the Internet via my ADSL modem which I have configured as a gateway. My conclusion is that the TCP/IP stack on the other computer had gotten all messed up, which prevented it from seeing the network. I am so very happy, and relieved that I did not have to jump out of the window. But let's not get too overly confident now. It all "seems" to be working fine, and I will keep my fingers crossed.
My life has been saved in the NIC of time. Get it?
...Several hours later. I discovered the culprit of my problems. Turns out to be my ZoneAlarm firewall. How do I know this for sure? Well, after I had a clean system reinstalled, I started adding the original programs one by one. All went fine, until I installed ZoneAlarm again. Bye bye and the network settings were destroyed. Fortunately I could rewind the settings at that point because I knew the source. I was wrong for blaming my kids for having installed Kazaa which I had unjustly blamed. Bad father, bad bad father. I think the kids will forgive me now because they can go on the computer. For the time being I have had an overdose of computers so I will take a breather now for a week or so. Maybe give up computers altogether now.