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 a broadband connection, like DSL or a cable or fiber connection, and are using a router (or if you're on another type of home or business network) then choose Yes, this computer will connect through a local area network or home network.
If your computer connects directly to the Internet via a modem (dial-up or broadband), 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 ->.