It is usually best to let XP handle the wireless rather than a program that comes with the wireless card, but different people have different preferences. I fund that most people find the XP wizard easiest to use.
Of course you need to enable wireless access if you want to connect to it with your laptop. Broadcast needs to be enabled, for you to see it and use the XP wireless wizard. I recommend for environments like yours that it always be configured. Some people set the SSID to something meaningful to them, but not others so that people can't tell who the SSID belongs to (e.g. "A5423" rather than "Smiths" In your case "MSHOME" is obscure, but if it is auto set it may eventually conflict with another neighbors SSID. Data rate to auto is fine. The wireless channe 1 is perhaps okay. The Channels 1,6,11 are the choices, you don't want to use other channels. If you look at the other devices in tthe area, look at what channels the stronger channels are on, and keep away form those channels. If you are on 1 now, and things are working, keep it there. You can try channel 6 or 11 if you have problems. The WEP encryption is not secure, but better than no security. With 802.11b, you may not have any other option. When you move to 802.11g (or 802.11n) later, you will want to use WPA2 encryption.