Setting up Lan

[YeahMe]

I need some help in setting up wired file sharing between two computers(one runnin xp and another win 7).I am successful in establishing connection.The doubt is when I remove the password on the shared file will the users across the world tooo can access it (as the router is also connected to the internet).If yes how to set up protected file sharing?
And the username and password being asked,is it the user login that i use to login to the computer?

[Geek-9pm]

Short answer:
It is normal for two or more PCs in a local wired connection will use IP numbers that are not used on the Internet. This is part of the basic design of how the internet works. This is called the IPV4 standard.
That means that your local computers will not be r sen om the Internet, even if there are no passwords in use. In fact, it takes special  effort to make you local files visible on the Internet.