Computer-2-computer 802.11b Wireless Networking

Sorry that this is a PC question, but here it goes anyway.

Computer 1:
Pentium 3 650Mhz/256MB RAM
Blittz PCI 802.11b model# BWI605
No internet access btw (though eventually will)

Computer 2:
PowerBook DVI 1Ghz/1024MB RAM
Airport card (802.11b Standard)

The powerbook(10.3) connects to various other access points just fine, but connecting to the WinXP box has been fickle. First I can only connect to it within maybe 10feet of the thing, and at that point I'm still in the same room and can see the actual antenna. And at about 4 inches away from the thing I get like a 64 percent signal strength. I don't know if it has something to do with the way I set the software up, whether there's interference, or if the antenna/card is bad. I request your assistance.

Also, how can I share folders in XP to everyone, yet still allowing them read only and allowing me (with login+password) r+w?