1) One switch + one network card per PC.
Cable model and both PCs connect directly to switch using straight CAT-5 UTP cable. One PC run a gateway software (like Sygate), the other PC configure to use DHCP.
Pro: easy, cheap
Con: no network neighbourhood possible between two PCs

2) One switch + 2 network card on PC 1 + 1 network card on PC 2
Cable modem connect to PC 1, the other card of PC 1, as well as PC 2, connect to switch. Run a gateway software on PC 1, and configure the public/private network adapters properly. Configure PC 2 to use DHCP.
Pro: full-fledged network with only one extra network card
Con: PC 1 must always be one in order to use PC 2.

3) One router + 1 network card per PC
Cable modem connect to router, both PCs connect to router.
Pro: full-fledged network, both PC are independent.
Con: relatively expensive router.