ScarletRose: Awful they can use different file systems, it should be irrelevant for routing.
Hrqls: Well, although it's possible it's some odd (and incredibly stupid ;) security feature I find it unlikely; especially when the system is being routed through the 'authorized' system.
Also, I wonder whether XP drivers would work on ME? So that might not work; but certainly it is worth a try.
mrloupcity: I'm not quite sure what your trying, when routing through the XP box failed did you replace the network interface card (I'm hoping it's that rather than, say, a sound card ;) with another one and:
(a) Connect it directly to the internet connection
(b) Connect it to the XP box again
If it's b, are you using a straight-through or crossover Ethernet cable (I persume it's ethernet).
I would recommend trying to get the XP and ME box just communicating with each other; not connecting to the internet, just having a connection. ping will help you there.