Sometimes it's a just matter of cleaning out the Win 7 printer driver
, and reinstalling the device. This worked for a Win 7 Pro SP1 64-bit with USB printer to a Win XP Pro SP3 32-bit machine:
On the Win 7 bit machine, go to Start, Control Panel, System, Device Manager. Up top, at View, select Show Hidden Devices. Scroll down to Printers and show the contents. You'll see the shared printer. Right click it and select Uninstall. This removes the faulty printer driver. Restart the machine. Make sure the printer is on and shared. Windows 7 will download and install the good driver. When printer is ready, go over to the Win XP Pro machine. Go to Start, Settings, Printer and Faxes and select Add Printer. Browse for the networked printer on the Win 7 machine and add it. You'll be pleasantly surprised.