Lets try pinging 127.0.0.1 first to see if the IP protocol stack is installed correctly.
If you can ping that (on both machines) and you have both IP's in the same subnet range (if configured above using 192.168.0.1 and .2 using 255.255.255.0 then you have) then try pinging each other, which doesn't appear to be working.
Go to Start - Run and type eventvwr and the event viewer will pop up. Have a look in the system log to see if there are any errors pertaining to the network card or TCP/IP installation. If you can ping 127.0.0.1 and you can't ping the address in the same range then it is highly likely you are experiencing some hardware issues.
[Edited on 8-11-2004 by tp-996]