Can't use my router without internet?

I have two laptops that I'm trying to connect through a router. One is old, running xp sp2, the other is brand new running vista, and has a built-in wireless card.

I'm usually pretty smart when it comes to computers, but I know next to nothing about networking. I bought a router (Belkin, wireless G plus mimo), hoping to connect my two computers together. What I had in mind was to be able to play two-player games on the computers, instant message, and maybe use a webcam, all over the wireless network, without internet. I also planned on being able to have some internet access on my new laptop while the old one is the one that actually dials up.

The old laptop does not have wireless. I have a wireless card for it, but when I use it, the computer freezes for a second, about every twelve seconds.

So I connected the router to my old computer with a wire. The router came with a setup cd (surprisingly it hasn't tried to install any crapware) which I assume would guide me through the setup process...if I had a high-speed internet connection. It won't proceed until it gets its internet connection.

So...is my router useless until I get dsl? I know I could set up a peer-to-peer wireless network without a router...if my old laptop had wireless...but it doesn't and never will again. Can somebody help me with this?

first of all, make sure all the computers in your house are on the same workgroup. rightclick my computer -> properties -> computer name -> change button -> make sure workgroup is checked and name it something like TOMSNETWORK (its just a coincidence if tom is your name). then repeat with all the computers that you want part of you network. youll need to restart all the comps before the changes take effect.
to play games, it depends on what game youre playing. if it supports LAN games, then youll want to search for lan games, not internet games.
there isnt an instant messenger that i know of that doesnt have to first connect to a master server over the internet, so you may be out of luck there. maybe i'll write a program for you that will allow you to IM.
try plugging in the the wireless card into the old laptop before it boots up. completely shut it down first (dont just close the screen), then plug in the the card and start up. plug and play isnt as sketchy as in earlier versions of windows but its not perfect.

I plugged in the wireless card before powering on the laptop like you said, and it seemed to help, at least at first. I think it's just old, and it's time to get a new one. It may be a driver issue or something, I dunno, but before it started acting screwy, I saw my first sign of actual progress in three days. After tinkering around with it, I was able to pull up the shared folder that was stored on my new laptop. Then my old laptop started giving me trouble. It was the one I had set up the ad-hoc network on, and it was constantly connecting to the network and then disconnecting every eight or ten seconds. Weird.

Well, I wanted to use the router anyway, if possible, because I'm planning to put my old laptop on the other side of the house, and my old wireless card doesn't seem to do too well anyway.

As for the IM, I assumed Pidgin could do something similar to what I wanted, but if not, I think someone has already written one with AutoHotkey. Also, I am planning on getting DSL, maybe soon, maybe not...but I didn't think it would be necessary to set up a small home network.

I appreciate your help so far. This trying to set up a wireless network is much more trouble than I would have believed. I wonder, how much trouble would it be if I didn't use wireless?

i dont know what else to do.
but, setting up a network without wireless is actually about 3x easier.