Firstly, let me say that I don't think I entirely understand what you're trying to do (likely because I've never used a DS). It sounds like you're trying to purchase a USB wi-fi adapter that you can use to create an ad-hoc network with your DS, over which you can share the internet connection from your laptop's internal wireless card. Is that correct? If so, are you interested in help troubleshooting the thing you have now, or is that beyond hope? Not trying to bug you if you've already exhausted your tech support options, just wondered if you had questions about the device you already own.

Anyway, as to your specific questions, I suggest the following.

1) Are you a college student? Do you know any college students? Most colleges (or at least, a lot) have MSDNAA accounts, over which students can get free software. Which software you can get varies depending on the school's license, and sometimes other factors such as class (students enrolled in a CS course have different software available to them than students enrolled in business courses, for example). However, operating system licenses are pretty common. I've gotten two copies of Windows 7 from my MSDNAA access, and I can get Vista as well, I think. I don't believe XP is available to me, but I know that it is (or at least has been in the past) to other people. Might be worth looking into.

2) Do you have Windows 7 professional, or above? If so, you can run XP mode, which is essentially a virtual machine running windows XP within your Windows 7 environment. I haven't tried it, but I hear good things about it. It's basically a free license of XP, for the price of the VM performance hit (wouldn't be an issue if all you want to do is run wireless out of it).

3) Have you considered Linux? Linux is very easy to dual boot (or run in a VM), has excellent hardware support (I can almost guarantee your USB wireless thing is compatible with at least one of the major distributions), and is free. No worries about licensing or MSDNAA or whatever. Mainstream versions are also very easy to use, and easily figured out by anyone with an IQ above. . .say, 60. Also, most linux distributions have Live CDs, which let you burn a copy of the OS to a CD, and run the operating system directly from that. It's a little slower, but that would be a good way to see if the OS supports your USB stick like you want it to, without actually changing your computer at all. I'm not positive that the live CDs have hardware support as strong as the installed versions do (I'm not positive they don't, either) but this would be a good thing to try.

4) Just as a final shot in the dark, does your school have a Guest wireless network? A lot of schools have a primary network that's all locked down and requires registration/security stuff, and then an open, minimally secured Guest network. Have you specifically tried getting your DS connected to the Guest network? I'm sure you've probably looked into this, but just in case you haven't (it's easy to set your computer to connect automatically, and then forget about it for months/years), I thought it was worth mentioning.

Sorry for the wall of text, but maybe some of that will help. Let me know.