Currently I have the following setup:

A 2Mbit leased line used that is used for internet access and e-mail services. The network is tiny with only 15 computers. Staff from another company will be sharing our premisis but will have their own dedicated network equipment and internet access. (They have about 7 computers, these share a wireless internet connection.)

One of the computers from the company that shares our building is directly connected to our network. This allows them to connect to some of our servers in order to use terminal services. This also means that computers on their network can easily attack ours.

I would like to completly separate the two LANs but still allow them to access certain resources on my LAN without going via the internet.

What I'm thinking of doing is setting up a Ip-Cop firewall for the other compnay that allow traffic from their LAN get to my LAN without going via the internet.

Their firewall would be connected to our internal LAN a well as to their wireless service provider. (the wireless unit uses PPPOE)

I'm looking for documentation that would assit with this implementation as well as any suggestion on a better approace.

If you would like to be in control I would suggest that you set up a computer with 2 Network Cards (NIC), connecting those cards to your LAN and theirs.
On this machine you would manage the firewalling and security, only allowing acces to the particular servers.
Apart from this basic security that a firewall provides, you can set up various services to check on the traffic (intrusion detection).
Also think about how you will handle user accounts, file permissions and authentication for the other company.