The desktop should be getting it's IP address from the router, if it isn't you may need to go into the router setup and enable DHCP on it. Or did you unplug the desktop from the router? I have to confess that I'm struggling to understand what it is you're trying to do here
As for the "unidentified network" you'll need to set the network name to the same on both computers.
I have a laptop running Windows 7, with a WiFi and Ethernet connection, it is connected to my router by WiFi.
I also have a desktop running Windows XP that only has an Ethernet port.
I tried Googling several guides but could not figure out how to make this work.
How can I share my internet connection so I can connect the XP desktop by ethernet to the Windows 7 laptop and use it's WiFi connection to provide internet access to the XP desktop?
What do I have to do on both computers?
For me, the solution was a crossover cable. I have a laptop with Windows 7. I have a connection to a wifi AP. I have a desktop that needs to connect to the wifi but doesn't have a wifi card.
1. I first connect to the wifi.
2. Then in control panel -> network connections, I right-click on my WiFi adapter (not the virtual wifi port) and then Properties, and then click on the sharing tab. I put a checkmark in "Allow other network users to connect through this computer's internet connection". Under Home Networking Connection drop-down, I chose "Local Area Connection" which is my laptop's LAN NIC.
3. I unchecked Allow other computers to control...
5. Make sure the LAN NIC you will use for connecting to the other computer has any static IP configurations removed and set to DHCP.
6. Make sure the LAN NIC on the desktop you will connect to is set to DHCP also.
7. Connect a crossover cable from the laptop to the Desktop.
8. If it's windows vista or 7, then it should connect and present you with the "Home network, Public Network, Work Network." Choose appropriately.
You should now be connected! If the desktop doesn't automatically connect, you may want to "Diagnose" or "Repair" the LAN connection.