There are a couple of ways to connect the two machines,
1. Via an ethernet cable (straight through, not x-over)
2. Via Firewire Cable (May need an adapter if your new machine has 800 and your old machine has 400)
When Migration Assistant works as designed, as it almost always does, the at the end of the procedure your new Mac has everything in exactly the same place as your old one.
All your Settings, Preferences, Networks, Accounts, Applications (but not those that exist in your new OS version; iTunes,iPhoto,etc.).
All your Music, Pictures, Movies, Documents, all the stuff on your desktop, right down to your desktop picture.