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Originally Posted by ph00l
I currently have the two physically connected with an ethernet cable
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Please answer to larkl -- are you using a crossover cable? You need to (or else plug two straight cables into, e.g., a hub).
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the "eth0" status is down, how do I enable it?
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In the simplest case
ifconfig eth0 up, but maybe you should get an IP address. I don't know what Microsoft means with "connection sharing", but maybe they offer you an IP address etc by DHCP? In that case,
ifup eth0 should get everything running, assuming again you have the Linux box configured appropriately.