I think it goes Wireless Router > Wired Router > Modem > Bridge in order from most to least amount of work the 2wire RG does. As a wireless router, it does everything, and pluging the 655 into it would be like plugging a 655 into another 655. As a wired router, you can set the 655 as a wireless access point. The 2wire still does all the routing, NAT, firewall, etc, but the 655 handles the wireless part. As a modem, the only thing the 2wire does is the PPPoE handshake. It still has routing functions (since it's own LAN ports still provide 192 IP's) but the traffic to and from the 655 is outside the routing, and any misc traffic not assigned to any other computers gets dumped in the 655. In bridge mode, all it does it some basic handling of the traffic on lower layers, and leaves everything else to the 655. Which means it gets EVERYTHING coming physically through the phone wire into the 2wire. It even handles the password send. Some ISP don't work this way. Since it only accept the PPPoE handshake from the modem they have on file.
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Now with all that said. Lets get back to your OP. Your trying to get a LAN game? Hell, you don't even need the 2wire. Just use the 2wire as a full wireless router, and use the 655 to just create a LAN. You don't need internet for a LAN...thats the whole point. I know for a fact. My ex played Civs 2 for months on a DGL-4300 with no internet what so ever. Just a power cord to the router, wireless to two laptops. As long as your 2wire network and 655 network have different names, you should be fine. Where I think your actually problem is the networking between XP and 7, and nothing to do with the router.