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Switched Ethernet
Ethernet for more than two computers
Crossover Ethernet
Ethernet for two (and only two) computers
AirPort (wireless)
Apple's AirPort and other wireless network options
Home Phone Lines
Products that use home phone lines to create a network
Connecting LocalTalk networks to Ethernet
Two-Mac LocalTalk
LocalTalk networks for two (and only two) Macs
3+ Macs LocalTalk
LocalTalk networks for more than two Macs
3+ Mac Localtalk

For older Macs that have serial (printer and modem) ports, a LocalTalk network is probably the cheapest and easiest option. You need one LocalTalk adapter and one piece of phone line to connect each Mac to the network. You can add as many Macs as you like, although adding more than 10 or so can degrade network performance, as the network data travels through longer and longer wire.

Note that LocalTalk is pretty slow, transmitting network data at about 30K per second. Transferring large files can take a long time and your computer will become very slow during network use. If you need to copy large files, or back up your hard disk, you should consider using Ethernet instead.

Network Setup
You need one LocalTalk adapter and one piece of phone line for each Mac on the network. Proxim makes a LocalTalk adapter called QuickNet and others (PhoneNET, TurboNet) may be available from parts resellers. The adapters connect in a daisy-chain, one to the next. The two end adapters use terminators (included with the adapter) to close off the network, which you need for reliability reasons.

You generally connect the LocalTalk adapter to the Mac's printer port, which is the default port for LocalTalk networks. You set the network port from the AppleTalk control panel (Network control panel for System 7 users). Then connect the adapters to each other in a chain using phone line and place the terminators in the two end adapters.

If you are missing terminators for your LocalTalk adapters, contact a manufacturer (like Proxim) to see if they have replacement terminators available.

What to do next
Once you have your computers connected, see the functional parts of the site (Move Files, Share Internet, etc) to make your network do something.
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