now the machine sharing the connection has an internet gateway come up when I connect the machine to my router via network cable.
??
What do you mean? Do you see a new Icon in "network connections"? If you do.....it's fine...it's "universal plug&play"
What's prolly happened is your network card has lost it's IP settings.
How did you setup the LAN connection the first time? Was it via a wizard?
If it was, then all you should need to do is manually assign the IP address(s) again. Windows by default uses the following settings;
PC used to share internet connection
IP: 192.168.0.1
Subnet mask: 255.255.255.0
Gateway: should be blank on pc used to share internet connection
2nd PC
IP: 192.168.0.2
Subnet: 255.255.255.0
Gateway: IP of first PC (192.168.0.1)
Try those settings, if that doesn't work, can the laptop connect and view webpages?