How to join two seperate networks (ideally wirelessly) and share files without sharing internet connection?

Simple question I'm sure, but it's just not an area of networking I'm familiar with.  I'll try to keep this simple/generic:
1.) My apartment neighbor and I are good friends.  We both have LAN's setup with multiple machines/devices.  We want to share files / map drives / share devices/printers between our LAN's and devices like we are on the same Windows network.  Ideally what we are looking for is a solution that allows normal Windows networking/file/printer sharing etc.
2.) We are in two seperate Windows workgroups (Can change if NEEDED, would prefer to keep it this way).  
3.) We are using two seperate IP ranges, I'm 192.168.0.X, he's 192.168.1.X (Can change if NEEDED, would prefer to keep it this way)
4.) We use two seperate internet connections and we are looking to keep them seperate.  He pays for his bandwidth, I pay for mine.  If he connects to the web, it should never use my internet connection, and vice versa.  
5.) We each have our own primary router that is fed by our own respective internet connections.  (Can change if NEEDED, would prefer to keep it this way).

What we would like to do:
A.) Run a single ethernet cord from my primary router to his primary router to connect the two networks together
    1.) What would be required in Windows to make this work like we're all on one big happy network?  So I can browse to \\hispc\cdrive\movies etc etc, or he can connect to \\myPC\HPDeskjetPrinter etc etc.  Assume all PC's are Windows XP.  I'm quite saavy, just need generic info on the setup, not step by step instructions...
    2.) Would anything need to change in the router?  Any other hardware needed? Etc.

And secondly:
B.) Say instead of running an ethernet cable, I want to do all this wirelessly.  What if:
    1.) Both of our primary routers are WIRED.  Could I just add a single Access Point to each of our primary routers?  What would the network configuration / setup of these access points look like?  What kind of hardware would be needed for these access points or supported features? (Hardware suggestions appreciated)
    2.) What if ONE of our primary routers already has wireless, and the other is WIRED?  Could I add a single WAP to the wired router and "bridge" the two networks somehow?  Again, required network settings/suggestions?  
    3.) What if BOTH primary routers have wireless.  Anyway to "Bridge" the two together and have the desired functionality with no added hardware?

If there is a guide on this sort of network setup I'll gladly read it I'm finding a lot of "half answers" out there for what we're looking to do.  Thanks in advance.
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Let me start by saying that even in the simplest of the configurations, two networks with their own internet routers need some routing in between for each one to reach the other.

The "wired solution" would be my preferred and least expensive solution over the "wireless" solution.

Nowadays most cheap routers are shipping with RIP capabilities. If both ISP internet routers have this capabilities, you just need to insert a router with this capability too and you may not need to configure anything, since RIP will learn the routes between both internet and between the two subnets and route appropiatedly.

You need to add a router with two interfaces. Interface_0 (I0) for the network with IP [] and Interface_1 (I1) for the network with IP [].
Insert two routes into this new router, on I0 [route] and on I1 [route]
On ISP router for network add [route]
On ISP router for 192,168.1.0 network add [route]
The above will avoid having to add routes on each computer

You may need to get a Wireless Router (like Cisco 850W) that can provide routing ability for one side, let's say for the network, and then a Belkin/Linksys Wireless Access Point (AP) to connect to the WR. Setup similar roting as the wired solution for the router in the middle at the WR between the wired and wireless interfaces.
Setup route at wires ISP router.
I hope this helps!

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You wouldn't need extra hardware at all if you use a VPN through the internet, though it will be slower than a wired or wireless connection through the extra hardware.

Both routers should have DDNS support, so you can both go to and make a free domain name and the router will keep them updated with your current IPs ( - at step 3, setup DDNS in routers instead of installing a software client). That will let you connect without needing to know the other person's current IP (e.g. you would connect to and the neighbor would connect to, or whatever domain names you pick after setting up the accounts).

Some routers also have built in VPN support, but if not there are numerous free VPN clients.
I recommend using the 10.x.x.x subnet for your VPN, so there's no confusion about when you're in a VPN session

Here's other free VPN software -
i.e. I'm not shilling for either OpenVPN or Wippien, and do not currently use either... Wippien looks easier to setup initially, but OpenVPN appears to be more robust from what I've read in its documentation.
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