This is why I ask. Your advice to use different user accounts and passwords with each machine contradicts much of what I've read elsewhere so I need to make sure we are saying the same thing. From another conversation elsewhere comes this:
"As of Windows Vista, you must have a password associated with an account. Having an account sans password will generate the problems you are experiencing.
On both computers, the XP and Windows 7 system, create a username and password that is consistent between both computers. Using that account and password combination will then allow you to access both computer shares—providing you granted the passworded account proper access and permissions."
Now for me this doesn't solve alot, because I still cannot see the XPs from Win7 at all. Therefore I never get to the User Account level when I try and connect with the Win7 PC.
You heard wrong. That was an old fable that was floating around and it is completely and utterly incorrect. You also do not need to set up a password on any of the machines in the network if you don't want too. More false information I see. In any event you can also turn off password protected sharing if you need too.
I tested this on my own machines over 10 months ago when I first started using Windows 7, and also on the new 7600 build just to make sure. There is absolutly no way another machine will show up if it has the same name as the Windows 7 machine or any other machine on your network.
They need to be part of the same "workgroup" but cannot use the same name. Each machine needs it's own machine name,... Tom's-PC and so on. They can't and won't show up unless they have different names. Where you have to option to use a different machine name and user name on the same machine, both of those should be the same also.
It is important to be sure and enable all file sharing and network discovery on the XP machine. This is an easy mistake to make, trust me on this.