In this step, Windows XP wants to know whether your computer connects to the Internet through a network or if it connects to the Internet directly.
If you have high speed internet like DSL or Cable Internet and are using a router or if you're on a home or business network, choose Yes, this computer will connect through a local area network or home network.
If you are connecting directly to the Internet via a modem (dial-up or broadband like DSL or Cable), choose No, this computer will connect directly to the Internet.
Windows XP will see most modern Internet connection setups, even those involving only a single PC, as on a network so the first option is probably the most likely choice for most users. If you're really not sure though, choose No, this computer will connect directly to the Internet or click Skip ->.
After making a choice, click Next ->.