Sharing permissions on a small home network.

Alright so here's my scenario:

- I have a small home network with 3 PCs, which I'll call "PC 1", "PC 2", and "PC 3".
- "Folder X" is stored on "PC 1".
- I want to have "Folder X" accessible from "PC 1" and "PC 2", but NOT accessible from "PC 3".

How can I do this?

I've been trying to get this to work for a little while, fiddling with file sharing permissions, but I'm a novice when it comes to networking and permissions. Does anyone know how this might be done correctly? Additionally, I'd also like to set it up so that if any additional PCs are added to the network, they do not have access to "Folder X" by default.

All PCs are running Windows 7 Ultimate.
"PC 1" and "PC 3" are 32 bit, "PC 2" is 64 bit.
Using a WRT54G2 Wireless G router.

Right-click on Folder X. An option will appear to "Share With >". Then select the "Specific People" choice. A list of all the users connected to you network will appear. Select who you wish to share with, and don't select anyone else.

Users added to the network (via adding a new PC) will not automatically have access.

When I do that the only available list items are My Username, "Everyone", and "Homegroup". When I try manually entering the username, machine name, or machine IP address of anything else on the network an error reads "Windows was unable to find ... "

I just set up a wireless router and that works. But I cannot figure out how to add a laptop running XP to the network. The laptop sees the network but does not have permission to access it.

I ran the file on my XP machine and it told me I don't need it. Apparently it has already been updated.

All the folders are allowed to share on the XP machine.

Still can connect to the wireless network from the XP machine, but cannot get to the Internet through the router or see the folders of the XP machine from the Win 7 machine.