Yes, it is rather easy these days to create a home network between two or more computer systems. However, the first time it is done it can be a bit overwhelming due to how step intense it is. Depending on how you setup your network will determine how many different configurations you will be required to complete.
For example, if you do not setup the wireless access point of a wireless router and only use the cable ports instead, you cut down dramatically on configuration. However, wireless networking is very convenient and popular, so it is worthwhile to learn the steps required to properly configure security. Without security you take the very real risk of somebody in your neighborhood locking you out of your own wireless network and router configuration pages. There are several questions posted here with forum members asking how to take back a stolen wireless network after they were locked out due to not setting up security. However, it sounds like you know enough about networks to understand the security risks and that you do need to take advantage of the security features.
It is very simple to add a wireless router and create a network. I am going to provide a link to a Vista Networking Help and How-to page. Nearly everything you need is contained in the links on that page. However, because you also have a Windows XP machine I am going to provide a link to the Windows XP Networking Help and How-to too. I am also going to provide a link to the page on Connect Now technology. It is in the XP Networking pages but I will provide the link rather than attempt to explain where it is as that is simpler.
Connect Now technology really has taken most of the mystery out of setting up a home or small office network. It is extremely easy these days to setup networks because of these advances. If you have Connect Now hardware you can quickly add a router and the configuration files by storing them on a thumb drive.
Now, Windows XP has a partial implementation of Connect Now technology. Windows Vista has a full implementation. So, your best bet is to start with your Vista machine in adding the Router. This way you can ensure your configuration files are all contained on the thumb drive. You then take the thumb drive to each system and simply plug it in after opening the Network Setup Wizard. In XP this is located in the Control Panel or the left upper side of the Network Connections Folder, which you can access either through the Start Menu, or by right clicking the connection icon in the notification area and clicking on Open Network Connections option in the shortcut menu.
When you go to select your router read the contents portion on the box and ensure the router has a working USB port. That USB port on the router is how you use the Connect Now technology. Simply follow the instructions contained on the pages in the links I am providing and you will be up and running in a short amount of time.
My main advice is to read all the instructions on the type of network you wish to create before you begin. This way you familiarize yourself with the process. The page contains links to how to setup the wireless security, which you do after your network is complete and you have ensured your computers have Internet connectivity. Please note that while you create and enter the wireless security encryption password or passphrase, you will temporarily lose your connectivity. As soon as the password is correctly entered your connectivity will be restored.
Here are the links I promised:
http://www.microsoft.com/windowsxp/using/networking/setup/connectnow.mspx
http://www.microsoft.com/windowsxp/using/networking/default.mspx
http://windowshelp.microsoft.com/Windows/en-US/networking.mspx
Good luck, have fun creating your first network, and please have a nice day.