Using a 2 wire modem hooked to a netgear router. When I shut my computer down the light on the router shuts off for Number 2, yet on the other computer the light never shuts off, always shows its getting a signal off Number 1.
If I understand what you're saying correctly, you're saying the router is on and computer 1 is on, and you're gteting a signal on port number 1. That makes sense, since the device on both sides of that port are on.
If you mean the light is on for the computer you shut off, then you didn't actually shut the network card off. Many computers keep their network card on even when the computer itself is shut off (but plugged in and the power supply turned on).
Wake On Lan is obviously available on your PC. It makes it possible for your PC to wake up (bootup) from power-down state by sending a special Wake-On LAN packet from another PC in your home network.
I highly doubt that your router is capable of waking your box up.
In Windows, go to Control Panel, System, Hardware/Device, select your network card, and look for tabs indicating (depending on your Windows' version) that would give you multiple settings of your network card. Wake On Lan is one such feature. Not sure if WinXP uses Power Management instead.