Here is a link to the IP-Masquerade-Howto. It gives very good details on how to do what you
are trying to do.
The first thing you need to make sure is that you can ping between both machines. Once you can do that, setting up the IP-Masquerading is pretty straight forward. (It has been a while since I have read the HowTO, but if I remember right it doesn't go into much detail about setting up the ethernet cards (that might have changed). This should help with that.
Hope I have been helpful. I'm not trying to tell you to RTFM, but these howto's were written by people far better that I at setting up this stuff.