ip addressing issue in win98?

I have a client who wishes to network his laptop and desktop pc. I have tested out a pc lan card for the laptop in my workshop by linking it to a desktop pc. I shared each local drive out and installed file and printer sharing and client for ms networks, however, I was only able to finally get the machines to recognise each other after assigning ip addresses for each machine. I then attempted to dial up to my isp on the laptop and was unable to establish a connection. It was only after I changed the ip setting to “Obtain IP address automatically” in Win98 that I could dial up again. I had thought there was a way to establish a peer-to-peer network without using IP addressing.

Any clues?