Here, 1, 2, 3, 4 are the links. 

1 =>MTNL's telephone line 

2 =>LAN cable 

3, 4 =>Wi-Fi links. 

Note-> 3 can be a LAN cable too, that is if the PC doesn't have a Wi-Fi card. 

Note-> DHCP or static IPs(recommended) can be used for the network to configure the machines 

Lets suppose A is connected to D through LAN cable. 

On the Wi-Fi router there are several LAN sockets numbered from 1 to 4. Connect one end of the LAN cable to any of those sockets and then connect the end to A. This establishes link No. 3 

Now, switch on A. Go to control panel -> Network connections -> LAN (Ethernet) connection. 

Configure it as: 

IP -> 192.168.1.5 

Subnet mask -> 255.255.255.0 

Gateway -> 192.168.1.1 

DNS -> 192.168.1.1 

Now, open a browser and type 192.168.1.1 

You should see the configuration wizard. Ignore it. (read the manual to bypass the wizard since its router specific). Insert non-formatted text hereInsert non-formatted text here Now, configure the wireless interface on the Wi-Fi router. Here need to enter the following instructions should be entered: 

ESSID and the Encryption 

Set the ESSID to say, HOMENET ( use upper case ) and encryption to WEP or WPA. Check if the laptop supports WPA. If not, use WEP ( Note: WEP is weaker than WPA ). Here a key is also needed to be set. Enter a passphrase and it'll make a key. Copy the key and save it on the computer. Keep it safe as it will be required in just a while. 

Now, go to the DHCP settings, disable DHCP. 

Then go to the LAN Settings, change the IP range of the router from 192.168.1.1 - 192.168.1.255 to 192.168.0.1 - 192.168.0.255. **THIS IS IMPORTANT. 

Now, save and reboot the router. At this point the Wi-Fi router will not be accessible from A. 

Now, fireup the laptop, search for wireless networks using the windows wizard. Once it finds the network connect to it. At this point it'll prompt for the key. Copy and paste the key. 

Now the connection to the wirless network(link no. 4) has been established. 

After this step, go to the wireless network connection. There set the network connections properties to: 

IP -> 192.168.1.10 

Subnet mask -> 255.255.255.0 

Gateway -> 192.168.1.1 

DNS -> 192.168.1.1 

Note, only the IP has changed. Rest all settings are common to A's settings. 

Now, A and B are setup. Lets see if they can talk with each other. 

Remember, disable all firewall softwares BEFORE you try this: 

On B, Go to start menu -> run -> type cmd.exe 

Now you'll get a command prompt. 

type -> ping 192.168.1.5 

If you see something like: 

Reply from 192.168.1.5: bytes=32 time<1ms TTL=64 

Reply from 192.168.1.5: bytes=32 time<1ms TTL=64 

Reply from 192.168.1.5: bytes=32 time<1ms TTL=64 

Then the connectivity is fine. If not, then somethings wrong. So check the connections and settings once again. Check if the firewalls blocking or not. 

Ok cool! so we have internal connectivity. 

What next? 

For this just plugin the router to the power supply. Connect a LAN wire from the LAN port of the router to ANY of the free LAN ports ( 1 to 4 ) on the wireless router. This is link no. 2 in the diagram. 

Switch on the router and enjoy net connection on both A & B. 

BTW dont forget to plugin link no. 1 into the MTNL router.