whats a computer to computer network used for please?

This is to create an "ad hoc" network or a wireless network between two computers without need for a router.

Say you are at a friend's house and his machine and yours have WiFi cards but he doesn't have a router. You could set up an ad hoc WiFi network and still transfer data wirelessly between your machines.

You want to set up the time capsule as a router, distributing IP addresses and sharing out the internet connection that it received from your modem, LAN, etc.

Set up all computers for DHCP and they will get an IP address from the router (Time Capsule). Go to System Preferences>Sharing, and turn on File Sharing for both machines. Now, you should see each computer in the SHARED section of the sidebar.

If you connect as Guest (default) you will only be able to access the public folders. If you click the "Connect As…" button, you can log in as one of the accounts on the other machine and access all of the files in that account.
Or, you can set up particular folders you wish to share out, assign privileges to users, and use those folders to transfer files back and forth.

Further to Barney's reply. If you are not copying large files across and not wanting to copy many files at one time, Barney's reply is best.

If however you have large quantities to copy at one time it is faster to start one computer in target mode by holding the T key at start/restart, then connect it to the other machine using firewire cable. The target disk will behave as though it's an external drive of the other machine. when you've finished eject the 'disk', disconnect and switch the machine off.

Neville