How to setup a PXE boot server?
You would need to setup a DHCP server for handling the assignment of the IP address to the laptop, and then set up a PXE server to handle the boot file transfers.
To do both of these functions, I would recommend you install TFTPD, available here: http://tftpd32.jounin.net/
Basic steps are:
Download and install TFTPD, and then add port 69 to the Windows Firewall exceptions list (Control Panel - Security - Firewall).
Assign your computer a static IP address.
Configure TFTPD with the bootfile location and DHCP range.
Connect the two computers with a crossover cable, or use a switch and patch cables.
Boot the laptop with the network boot (PXE) option enabled.
To boot a Windows image, I recommend Steve's answer: How to install Windows 7 from the network?