Router brand/model?
First, make sure your XP machine is at Service Pack 3 because that includes WPA2 which allows for a higher level of security (constantly changing encryption code so sniffers can't watch for repeating patterns to figure your key, if I understand correctly)
You will need to use the desktop/laptop that is physically connected to your cable/dsl line. Start by installing the software BEFORE making any wiring changes then WHEN THE SOFTWARE TELLS YOU TOO, you will unplug the network cable from your computer and plug it into the wireless router. The router comes with a second cable that you then run out of port1 to the computer (plug it in where you just unplugged the one you moved to the router input). And attach the power to the router and plug it in.
Try to access to the web on this connected machine. If you cannot access the web I usually call the router manufacturer (you'll be on hold for 20-45minutes but they tend to be some of the most helpful support you'll find (at least that's my experience with Linksys & Belkin). Note, one possibility if you cannot access the web at this point, it is possible the box you got from your phone/cable company is actually a modem/router and the new routers IP address matches the phone/cable companies - in which case you will need to change the IP address of the new one.
Now you need to log into the router.
There is a place to change the actual router password - change it so nobody can hack it from the web. (If you ever forget the router pswd you can do a hard reset on the router to set it back to default and start this all over again.)
At this point the software should ask you to name your network like KalsLAN and then it should ask about security, you want WPA2 and you will create a passphrase/keycodes/whatever - you will need the code to allow the laptops to connect. There is also an added security as to whether you want the network broadcasted - basically the router sends out a signal "Hey I'm KalsLAN!" - for now leave this to yes. After a few days with everything working you can go back and set this to no for some added security, as it's harder for people to sniff your LAN if they don't know it's out there.
Now the router is setup, on to the wireless ...
If the physical connection you used to setup the router is also a laptop with wireless capabilities, you can now disconnect it (only disconnect the cable running between the computer and the router, LEAVE the router on and plugged in and leave the cable connection from the router to the modem)
For the Win 7 laptops, run the Win 7 network wizard and since you should be broadcasting, look for KalsLAN and select it. Provide the passkey. It should tell you connected. Access the web.
It's been so long since I connected from an XP so see if this helps (I haven't read it but) it came up first in search and its from MS so...
http://www.microsoft.com/windowsxp/using/networking/setup/wireless.mspx