Windows 7: homegroup will not take password

i have Windows 7 ultimate on desktop, Windows 7 home basic on new laptop. i create a homegroup on desktop and have the "avalible to join" on the laptop. i enter the password(which i changed to something easier to remember), hit Next and its "thinking" for about a minute, and i get this.....Windows cannot setup a homegroup on this computer.....its the same if i create it on the desktop or laptop...tried fixes in other threads to no avail...any ideas?

to add more info:
i have ensured the times are set the same
tried to use the original password before i changed it...took about 3 seconds a character...too long for me but i tried anyway.
tried the trouble shooter on both systems.
left homegroup on desktop, restarted both machines and created one on the laptop, no luck there either, ran the troubleshooter on it too.
disabled windows firewall on both.
i can see either under networking, but i just cant join one to the other.
the desktop had Windows 7 installed fresh about a week and a half ago, the laptop is new with Windows 7 home preinstalled.
it doesnt tell me the password is wrong, just that it cant setup a homegroup on this computer.
tried to map a network drive from one to the other, but when i went to open it, it asks for a password....i havent set any passwords other than for the homegroup...which it wont take....

im fresh out of ideas...

Check in Device Manager, do you have any error codes (yellow triangles) on the Teredo Tunneling Adapter or the 6to4 adapter?

IPv6 is required for Homegroup sharing. I had a similar issue and had to do a registry edit to get my IPv6 working again, try this thread for a fix if you have errors on either of those adapters. IPv6 is on, but can't join homegroup!

no errors in device manager, IPv6 is active...i gave up on homegrouping...created a work group...works for my purposes...thanks tho

I am having the exact same problem, in addition to your steps I also ensured uPnP was enabled on the router. Have you seen any other threads on this elsewhere?

What firewall software are you running?

I was running Norton, and I couldn't successfully do a homegroup until I removed it.

My symptoms were a little different, but you might want to shut down whatever firewall you are using and see if it works.

I am running a homegroup and IP V6 is completely disabled on both of my systems.

I have all firewalls disabled at the moment for troubleshooting. No luck, IP V6 is enabled on everything. I tried changing the password to something but that didn't make a difference.

How can it see the homegroup and not accept the password?

Had same problem. In my case I went to Network and Sharing Centre under Control Panel then clicked on Advanced Sharing Settings. Under the 'File Sharing Connections' radio buttons I selected the second option "Enable File Sharing Devices that use 40 - or 56 bit encryption" and hey presto the computer which was failing to accept the password accepted and all was working. I suspect it's because my laptop is a 32 bit machine whereas my PC is a 64 bit.

Hope this helps you as I couldn't find a solution before trying this !