You will see much better performance from an ethernet switch approach versus an internet sharing approach. Upgrade from the usb connection to the first computer to a RJ45 connection via a gigE switch. Then connect the second computer to the gigE switch. The gigE switch will make local file sharing amazingly fast and will significantly speed up applications like Kavoom.

I have:
Cable modem connected to 802.11G enabled Wireless router connected to a gigE local switch.

Sojolly