What does APIPA stand for?
How are the two PC's cabled - cross-over, into Hub/Switch or BNC?
Subnet masks - just insure that both machines have the same subnet mask such as 255.255.255.0, but unique IP addresses (use WINIPCFG to verify both machines).
Can you PING x.x.x.x (type that at the DOS prompt), the IP address of each machine from the other?
Remove, if necessary any doubt that any and all other protocols from network properties are not a factor. This verifies that any operational network setup can only be a TCP/IP network.