Are both the host Windows 7 system and client WinXP system defined as being in the same "workgroup"?
Windows 7 has support for both "homegroup" (a new concept) and "workgroup" (compatible with WinXP). Both of your machines should be defined to be in the same "workgroup" if you want to share a printer hosted off of the Windows 7 machine.
Also, if your Windows 7 host is x64 and your WinXP is x86, there will likely be a
driver problem at "connect" time when you try to "add printer" from the WinXP machine to point to the shared printer on the Windows 7 machine. This is normally when the host machine provides a
driver over to the connecting client machine... so that you don't have to have a print
driver installed previously on the client machine.
Well, the 64-bit driver on the Windows 7 machine is unacceptable on the 32-bit environment of your WinXP machine. So normally you go through the "add additional driver" process on the x64 Windows 7 system, so that it has both 64-bit driver for itself and other connecting 64-bit systems, and also a 32-bit driver for other connecting 32-bit systems.
This latter driver-related issue is a second problem you may face eventually, when you finally can "see" the shared printer and try to connect to it. But for now, let's just solve your "I can't see it from WinXP" problem.
So, are both machines on the same "workgroup"? Do you know how to look on both systems? Do you know how to change "workgroup" if necessary on either system?