XP laptop can't locate printer on W7.

The printer is installed and working great, locally, on Windows 7. I then unplugged the printer's USB and plugged it into the XP laptop and installed the driver on the laptop. I can print locally from both machines but I can't print wirelessly from the laptop.

I tried to "add a printer in XP by clicking on "add printer". Then, in the add printer wizard, I chose "A network printer, or a printer attached to another computer". In the next window, I chose "search for printer" It says to select a printer from the list that pops up but my printer isn't there. The list only shows;
"Microsoft Windows Network"
"MSHOME"
"COMPUTERNAME" (the actual name of my PC)

I also tried adding the printer using "local printer attached to this computer" and checked "automatically detect and install my plug and play printer"
I've tried everything.
Here's some screen shots that might help.

It might help to download this .XPS document from Msoft which explains how to share with other Op systems and set printers up. Third one down is the one you want.

Download details: Windows 7 & HomeGroup: Sharing with Windows XP, Windows Vista, and other operating systems

Thanks, chev65, I found that I had to turn off "Password Protected Sharing" in the "advanced sharing options" box. I have no passwords on either computer, yet, when I typed the path and clicked next, a password prompt popped up. After I turned off "Password Protected Sharing", no more password prompt and the printer installed. Everything works now.

I didn't realize you were getting the password prompt. That settings seems to cause problems even if a password was never set.