Set up the desktop with a static IP address of 192.168.0.1 and subnet mask of 255.255.255.0 and set that up with a shared connection and windows firewall disabled.

The workgroup is irrelevant as it is only used for file and printer sharing. If you do want file and print sharing and it's not working then it is highly likely that your firewall is blocking it.

Set up the laptop with another static address of 192.168.0.2 and subnet 255.255.255.0 with windows firewall also disabled.

You will only need to run the personal firewall on the desktop and this box will act as the firewall and nat router for the laptop - which will now be the most secure of the two.

You may also need to enter the primary and secondary DNS servers in the network configuration of the laptop. In fact I recommend you do this anyway. You can find them by opening a terminal on the dekstop and doing "ipconfig /all" look for the primary and secondary DNS server entries near the bottom and copy these into your network config for the laptop. Another way to do this if you can't find these is to enter the address of the dekstop PC (192.168.0.1) into the primary DNS field only for the laptop. This will also work.

It's worth noting that you don't actually need the switch for connecting two NICs together, only a crossover cable is required.