Not sure what you mean by "but each PC being totally unconnected internetwise" - is it a typo? If not, then why would you need to connect the other desktop to the ethernet port?
If this helps:
I have two machines, one Vista and one XP. Each is connected to my router and so has independent access to the net. Because they are both in the same workgroup, this makes it also very easy to transfer data from one to the other via MS networked shares.
Both machines have dual-head video cards, and I have two monitors. I have a Belkin KVM switch which lets me switch both monitors, my keyboard, mouse, and audio from one machine to the other.