I didn't misunderstand from what I'm reading here.
Quote> I can navigate from my laptop to folders on my win 7 pc and play files that way but I'm trying to get the library option working.
Sounds like you are attempting to share Library's to me. There is no Library sharing option for XP, you can't share Library's with the XP machine even if you can see them. Library sharing is a Windows 7 Homegroup option only. But like I said before, you can share all your music files using the Workgroup network.
I know which setting your talking about, it works for me because all my machines are Windows 7. But that is a very slow way to access Librarys compared to the regular interface. There is no chance that will work properly unless all machines are Windows 7 and you also would need to set up Homegroups for that to work properly which you can't do with Windows XP.