ok just thought i would write a guide and help anyone out who had troubles like myself.
1, Install Red Alert 1
2, Download & Install the following patches
Patch 1 (TFD Update, Just run the EXE) - http://files.ea.com/downloads/eagames/official/cc_firstdecade/TFD-101.exe
Patch 2 (TFD Update, Just run the EXE) - http://files.ea.com/downloads/eagames/official/cc_firstdecade/TFD-102en.exe
Patch 3 (3.03 RA Update, Extract to (Drive):\Program Files\EA Games\Command & Conquer The First Decade\Command & Conquer Red Alert ) - http://ra.afraid.org/html/downloads/patches.html
Patch 4 (3.03 TFD Fix, Place the "bmap.vqp" & "THIPX32.DLL" files into the above dir, and overwrite the current DLL, then run the "tfd-ra303fix.exe") - http://files.filefront.com/Red+Alert+Patch+Version+303+TFD+Fix/;5000445;/fileinfo.html/1/1
3, Next go into "My Network Places" in your start menu, and click "View network connections" on the left side. Right click your LAN connection and go to properties.
4, Click "Install..." then in the new window select "Protocol" in the next window select "NWLink IPX/SPX/NetBIOS Compatible Transport Protocol" Then click "Ok"
5, In the list above "Install..." on the first window again, click our new protocol and select properties.
Ok now this is the part what im a little unsure on because i just messed with mine and it worked. but anyway heres how mine is set and hopefully yours will work if its set the same.
6, Leave "Internal Network Number" as "00000000", Change "Frame Type" to "Ethernet 802.3" and "Network Number" to "00000002". (I set this the same on every computer.)
Also, Red Alert will not work well with LAN firewalls so disable it before you try and play. (Right click connection, Properties, Advanced, Firewall Settings, and then check "off".)
7, Repeat the above steps on each computer
The reason you have to set up a new protocol is because Red Alert is such an old game that it uses old LAN communication methods that arent installed automatically on XP. The patches fix Incompatibility issues and also 3.03 makes the menu a lot better.
Run Red Alert through the TFD menu, I find it a lot more stable and never get the "Insert CD" coming up that way.
On another note, if anybody wants to share how to make the editor work please do it asks for the CD even if its in.
Hope this helps
(Also thanks to Tore for helping me out when i had probs with it!)