I have 2 PCs connected to a Win 2003 Ent server domain (not R2 - this is the original 2003 version), although the Domain was originally setup using Win2K My laptop, which connects wirelessly has network discovery turned on and no probs. My desktop (Wkstn1), however, does not allow me to turn on the service. I'm on a domain not homegroup.
Both Win 7 installs were upgrades on Vista Ultimate, and both PCs have pretty much the same software. I'm using ESET Nod32 v4 on both (server has no AV). I was at one time able to turn on Network discovery (share drives and printers on the domain). Now no go.
The server has DHCP and DNS enabled on a static IP, and AD of course. I reserved IPs for the 2 PCs on the network. The gateway is a hardware firewall router (Watchguard) which also has a static IP.
I've tried resetting the Wkstn1 account (and resubmitting credentials) to see if that improves things but no. Group policy updates fine.