Internet connection sharing with Win XP and Win 98SE

My Win XP computer is connected to the internet.
However I installed NetBUI TCP/IP on both computers (except Win XP because it does not have NetBUI) and the Win 98SE computer can not use the internet.
I also assigned IPs to both computers and when I ping them I get a reply in 1ms.

Don't put NetBEUI on, it's not a routable protocol.

Set both PCs up with just TCP/IP, give them private addresses such as 192.168.0.1 and 192.168.0.2 (I think the XP machine needs to be .0.1 for XP's stupid net sharing). Once that works, set up sharing on the XP machine.

On the 98 machine, go to Network properties, and for TCP/IP, set the gateway and DNS server to 192.168.0.1, then restart.

When I put in the DNS ip on the win98se computer it says I must put in a host name.

No, not there. There should be a place to put the DNS *server* in. It's on the tab with IP address, netmask, gateway.