Network Question

I would really appreciate if anyone can help me out with this networking scenario. I am not upto date with any networking products and dont have extensive knowledge, would appreciate your feedback.

Please see the attached diagram. Here is the explanation.

Client 1 and Client 2 are connected to Server 1 in Location 1. They are a part of a Corporate Network (WAN)
Client 3 is at Location 2. Client 3 is also connected to Corporate Network (WAN)
Location 1 and Location 2 are connected through
Client 3 wants to Connect to Server 1 (so that client 3 feels that it is on the same LAN as Client 1 and Client 2) . What would be a good mechanism to achieve this ?

I did some research on this and found that this can be achieved using VPN. So I am thinking in terms of setting a vpn at location 1 and making Server 1 the VPN Server. Configure Client 3 to connect to this VPN. All communication would be over the internet.

Server1 : Windows Server 2003
Client 3: Windows XP.

If you are aware of any third party products that are reliable or might help to set up a VPN I would appreciate your expert feedback.
Thank you very much.

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