Thanks, Chev65, for letting me know about the homegroup and Windows7. But that didn't help. What I ended up doing is actually creating another subfolder in the shared folder that can be accessed. Then I moved the files into that subfolder. That worked. But moving a subfolder from elsewhere didn't.
Anyway, what I did notice when I right click on a folder (whether XP can access it or not) and choose 'share with', that there is a 'lock' symbol even though, in the actual properties, it has permissions set up to share with everyone. Strange...