A XE1541 cable only works from DOS, because interrupts need to be disabled to reliably read a certain pin.
To write floppies from Windows, Linux or anything that multitasks you will want a XM1541 or an XA1541 cable instead. In your PC end all of these connect to a parallel port, so you must have one of those. It has been said that for this parallel ports on add-on cards only work in DOS, but I've not tried one myself. It's also possible that you can't get it work with your parallel port. I had to iterate over many BIOS settings, and I hear the parallel ports in newer PC's are even worse.
The software you need for the PC is available at http://www.trikaliotis.net/opencbm
More information about different cables at http://sta.c64.org/x1541shop.html
You also used to be able to buy cables from there, but now it says that the shop is down. The parallel options require modifications to your 1541 hardware and are probably unnecessary for you. If you're only going to use .d64 images (think .adf), it just adds speed. Mostly you'd need if if you wanted to play with custom disk formats in .g64 format (think .ipf).
Floppies are probably easiest to acquire on eBay. I think 5.25 and even 8 inch floppies are still being manufactured, but getting a small quantity new is probably cost-prohibitive.
Originally Posted by gklinger
Either d64 (disk) or t64 (tape).
A t64 is only a container format for executables that is supported by emulators for a simple fake of a tape deck. A more low-level approach is the .tap file, they can host their own turboloader, loading picture and music .. the entire original experience.
Similarly a .d64 is fine for system disks, but for non-system disks and special purposes a .g64 image that preserves more of the disk structure is needed.