Extending network

[Kiwinote]

The situation is as follows:
-pc1 is connected to a network (with internet) through eth0 with a static ip-address. Pc1 has an eth1 as well.
What I would like to do is connect a pc2 with a static ip-address up to eth1 of pc1 so that pc2 is a full member of the network pc1 is in.

Both pc's run command line installations of hardy.

First step is the hardware setup: Should the connection between eth1 of pc1 and eth0 of pc2 be a cross-over cable or a normal cable?

After that comes the software setup: how can I achieve this?

Thanks,
Kiwinote