Can't network 7 and Vista

I have a new desktop that is running Windows 7 and a laptop running Vista. I have been trying to network these two together for 2 days now and have gotten nowhere. I have researched everything online and have followed all instructions, but to no avail. On my desktop I can see my laptop, but cannot access the computer (I get a cannot access \\(Computer Name). On my laptop I cannot even see the desktop. File sharing and printer sharing in ON on both computers and the hard drives are set to share. Workgroup is the same name.

Is it a firewall issue? Any help would be appreciated.

Thanks

Do you have Discovery set to ON on the win7 computer ?

Yes Netowrk Discovery is on. However, I have 128-Bit Encyption selected. Should I change that?

Try this Win 7 Vista connection walkthough, click on the Vista tab and follow the instructions.
Sharing files and printers with different versions of Windows - Help & How-to - Microsoft Windows

After going through all of that if you are still having file access problems try doing this registry adjustment on the Win 7 machine with the problem. If you are using an A/V software or a third party firewall it's usually best to uninstall them until after you have your network up and running. I have no problems using the 128 bit encryption.

If you are still having problems try this registry adjustment on the Win 7 machine which usually fixes this sort of problem.

HKEY_LOCAL_MACHINE\SOFTWARE\Microsoft\Windows\CurrentVersion\Policies\System
create or modify 32-bit DWORD: LocalAccountTokenFilterPolicy
set the value to: 1

I have followed the instructions and edited the registry and still nothing. I can see my laptop and vice-versa, but when I double click on it, I get an error message saying cannot access the computer. I even removed the third party firewall and am running windows firewall on both machines. I don't know what I'm missing here?