Make sure AppleTalk is using Ethernet on both sides? Make sure OpenTransport is updated and so on. Also ensure File Sharing is enabled if that's what you'd like to do.

Can any of the Macs see each other in the Chooser? Good luck!

Specify where the connection mode in the Appletalk panel.

Are you sure both Ethernets are working?

Trash the "Users and Groups Data File" on each, and make sure the two Macs have unque names, then restart.

The U & G Data File contains the unique AppleTalk ID, and if you've copied the OS9 System Folder from one Mac to the other, they'll be the same and you'll get something about not being able to start File Sharing at boot.

Sounds like corrupt filesharing prefs?!

When I read AppleTalk, I thought you meant the old PhoneTalk style cables that needed termination

Farallon? PhoneTalk?

Have you got a Mac OS install cd? Anything from 8.5.1 up should boot a PMG3. If so, boot from that and try to connect over AppleShare (after selecting Ethernet in the AppleTalk control panel). If that works then you know there's something wrong with the installed system. If it still doesn't connect then it may be a hardware problem.

I have an Intel PC with an Gigabit LAN on board and could never connect it to my iMac G3 with 10Mbit.
I had to install a 10/100 Mbit PCI card to make it work with PC-Mac Lan. I am no expert, but could there be some signaling problem between the Macs and the hub?
Can you check your connection with a crossover cable?

I apologize for my dumb suggestions, but did you dedicate a shared volume or drive on the Mac that is supposed to act as AppleTalk server?

Self-assigned doesn't really help either. So it looks like your "router" is actually only a hub. Not an issue, but you don't get DHCP from it.

Change both Macs to have manually assigned. Set one to IP Address 192.168.0.2, the other to 192.168.0.3. Set SubNet Mask to 255.255.255.0 o both. Leave Router blank, or if it complains, set it to 192.168.0.2.
How are you going to connect the two to the internet ? You won't be able to use dial-up while they are connected to each other. If you're going to end up connecting these to your broadband router, you can switch both Macs back to DHCP. If you're connecting them to your broadband router already, then there is an issue with Ethernet on both the Macs.

If you still have issues with the Macs after the wipe and install, let us know the make and model of your router, we'll see if there's something funny as to why it's not serving DHCP. Is there anything else attached to the router ?

That's the exact same modem/router I have. I've had Appleshare working between a 7500 (7.6) and a iBook (9.2.2) just fine. With DHCP. Check the router settings and see if DHCP is enabled (Advanced->Lan IP Setup->Use Router as DHCP Server)

Otherwise if you find you have to enter the details manually, the only thing that looks a bit off in Bertyboy's post is the router should be set to 192.168.0.1, not .2

Do you have another computer, that you can set up as Apple Talk server?
Even an old Windows machine with PC-Mac LAN might do, to check the connectivity.

Woohoo, excellent progress. Ironically, same (OK slightly later) router that I use (I have the v1, upgraded as far as it can go, to v3).

Set TCP/IP back to DHCP (from Manually). And test each individually.
With regard to manually setting the Router IP address to 192.168.0.2, it looked like there was no contact
whatsoever with the actual router, so a router address of 192.168.0.1 would just have slowed (REALLY) everything down while your Mac timed out looking for 192.168.0.1.
The subnet mask, 255.255.255.0 is perfect for small LANs, it means that eveyr other computer whose IP address begins 192.168.0.x is considered on the same LAN. When you set TCP/IP back to DHCP it should automatically be set to just that.

Does the light on the port for each flash orange or green. Orange is a 10mbit connection, Green is a 100mbit connection.

Being unable to load the SLP Plugin can be a problem, it's the Service Location Protocol engine, that you need to locate AppleShare servers on your LAN. Do both Macs get that error, or just one of them ?
It's not the end of the world, you can always use the Chooser instead (I always hated the Network Browser, it proved too unreliable and crashed more often than not), and key the IP address of the other Mac into the box at the bottom.

Do the Macs have different names ? (In Sharing Control Panel)

Have you set it so File Sharing clients can connect over TCP/IP, it's a checkbox in either the TCP/IP control panel or the File Sharing control panel ?

Going back to that "File Sharing could not be started" error. When you erase and install the OS, is it from a retail install disc ? Or are you copying it from another Mac (OK, even though you have no network activity) ? I've only seen this error when the System Folder has been copied from one Mac to another.

Open the AppleTalk control panels when each is connected to the router. Tell us the Network and Node IDs that come up on each,

Grrr. That's the PowerBook back to a self-assigned IP address.

I now wonder if it's something with the router (checking how it looks on mine) ....
configure it from the PMG4. Apologies now if my questions assume that your knowledge is limited, I doubt it is, but some questions I just have to ask).
Under "Advanced" in the pane on the left is the "LAN IP Setup". From the top ...
IP Address should be 192.168.0.1
IP Subnet Mask should be 255.255.255.0 (like already mentioned).
Use Router as DHCP Server should be checked (think you already confirmed this).
Starting IP Address should be something like 192.168.0.2
Ending IP Address should be something like 192.168.0.254 (well as long as it's not a very low number).
Under that you may have some address reservations, as long as they all fall into the range set above and leave plenty of free IP Addresses to use.

Ironic that you ue a BT Home Hub 2 as your main router and keep the Netgear for a spare. I did the exact opposite, BT Hubs been in the box since it arrived (and the 2 BT Home Hubs before that too before I sold them on eBay) while the Netgear hasn't been switched off in over 5 years.

Just a quick thing to try. The two having the same Node ID is bothering me. I don't think they should be the same.

Can you fire up the PowerMac and start the network access, ie. I used to start Internet Explorer, ie. get it "warmed up".
Then start up the PowerBook, and start IE (or whatever).

From my (old) understanding of AppleTalk, the node and network ids are stored in PRAM, when it starts up it scans the network to see if Node Id is already in use. If it finds it is, it generates another one and tries that. Node Ids should be between 1 and 253 (0 is self, 255 is broadcast, 254 is Apple internal).

hang on, I'll shut up and let Apple do the talking ...

http://support.apple.com/kb/HT3034?viewlocale=en_US

I've had that exact problem with a Cube of mine, AirPorts FTW.

Glad to hear you got it sorted. Even if it did mean discovering your Peebee's port is borked...

I'm not so sure it's bust. I'd try other cables (like the one used for the PowerMac, other ports in the router, all the buttons in TCP/IP control panel, trash all the prefs and try again, maybe even another wipe and install. Even a power down (battery out) overnight. I'd also try cleaning the Ethernet port contacts, maybe inserting and removing an Ethernet plug 20 times. If it's been unused for a long time, the contacts become tarnished and you get a bad connection. Same is true of the modem port, and in desktops, extremely true for PCI slots - in 10 year old Macs cards sometimes need to be fitted and removed 3 or 4 times to get a good contacts. Same for the PCI cards themselves, first trick is to take a pencil eraser over them all.
Not saying do that with the Ethernet contacts, but they may need to see plenty of activity before working again. And I'm sure you'll appreciate the 100mbit/s over the 11mbit/s you may get on AirPort.

Thanks bertyboy for that advice, I'll see if that helps my busted connection.