After some testing, I've made a Win XP Internet Connection Sharing network work properly.
Problem: "get hosts failed....etc" error message when playing on a 2nd computer while the first is logged into AO. Can play on the other server, but not the same server as the first computer. Host Computer uses WinXP ICS (Internet Connection Sharing) to share the single Internet connection.
Solution
On the host computer:
1. Open "network connections" under start -> control panel.
2. Right click on "Local Area Connection" (or Local Area Connection 2 is the first Local Area Connection is your Internet connection that is sharing the Internet), and double click or push the properties button.
3. Highlight "Internet Protocol (TCP/IP)" and double click or push the properties button.
4. Note what IP is listed on under "IP address". It should be 192.168.0.1 if you didn't change it to something else.
Now use that number on each client like so (client can be any Win OS)
Clients:
1. Change the default gateway under the TCP/IP settings (this is done either as above on XP or just right click network under Win98/ME) on each client computer (that you want to play AO on) to 192.168.0.1 or whatever that address was we found above. Then reboot the client.
That has worked as I tested it. Let me know your results or questions in this thread.