Windows XP - Network Printer Setup
1) Connect the printer to the "client" PC, as though it were to be used with that computer, and install it. This ensures that it has all the necessary software/drivers on board.

2) Reconnect it to the "host" PC and, in its Properties, set it as "shared". In the client's "My Network Places" (or Network Neighborhood), the printer should then appear as a shared resource of the "host" PC, along with any shared folders. Double clicking the printer in the remote PC should automatically install it as a "network printer" in the "client". This means that the "client" now has the same printer installed twice - once as a "local" printer and again as a "network" printer (with a bar under the icon to indicate a network device). If you are always going to print via the network, you may want to set the "network printer" as the default.

Otherwise, have a look at this Microsoft article. It is an old article written for Windows 95, but the basic principle for installing the network printer should still be valid.

http://support.microsoft.com/default.aspx?scid=kb;en-us;141839

Windows Vista - Network Printer Setup
1) Connect the printer to the Vista "client" PC, as though it were to be used with that computer, and install it. This ensures that it has all the necessary software/drivers on board.

2) Reconnect it to the "host" PC and, in its Properties, set it as "shared". Make a note of both the host PC's "Computer Name" and the printer's "Share Name".

3) In the Vista "client" PC, launch the "Add a Printer" wizard and select the "Add a local printer" option. This automatically opens a new dialog box in which to select the Port.

4) Click the "Create a new port" radio button and leave the drop-down menu options on the default of "Local Port". Click Next.

5) A small box opens in which to enter the Port Name. Type in the path to the "shared" printer in the host PC using the format \\computername\sharename where computername and sharename are the details you noted in (2) above.

6) Select the Printer driver from the list provided, which should include the driver you originally installed, otherwise use the "Have Disk" button to install the correct Vista driver if it is not in the list. It is essential that a Vista-compatible driver for your printer is used. Click Next.

7) Give the printer a name and choose whether to set it as the default. Click Next.

8) Print a test page to verify functionality and then click Finish.

Sorry to say but part of that seems a long-winded way of setting up a network printer.
No-doubt it will work, but this may be a quicker way, without having to actually install the printer on both PC's

1. Add the printer to the main (Host) PC.

2. From any other (Client) PC, from printers in Control panel just select "Add New Printer" followed by "Network Printer"

3. From here on you just navigate through to the Host PC and select the printer that you want to use and the necessary drivers will be transfered and installed.

This method can be used in both Vista and XP.

My Host is XP and my Client is Vista.

I have to admit it was sometime ago when I set mine up.
So I can't remember if it asked for the disc, on that occasion.

With a XP to XP setup, it does not ask for a disc.