Cannot connect from Windows 7 to Windows XP

No passwords needed for that. I've been sharing with my XP machine for over 6 months and I do not need to use any passwords.

You only need to set up basic file sharing on the XP machine and then enable the appropiate sharing tabs in Windows 7. You only need to worrie about passwords if you set them up before hand.

It's so easy I'm not about to go into details on it because it will only complicate something that is already beyond simple.

Shibu, this is easier that you are making it out to be and there are no tricks to it. If you can't access the XP machine then work with the sharing settings in XP until you can do so. It's that simple.

Just had the same problem on XP Pro x64 no less. As always, both PCs must be on the same workgroup and both need log on passwords. Simple file sharing was on by default. I ran the Network Setup Wizard, which was set to "MS Home" as the workgroup by default. That has to be changed to whatever is used on the 7 machine. Then I shared the folders which, when the dialog box opened, allowed me to share by enabling the share checkbox.
Log offs I believe are necessary after password and user additions.

Now I can connect screaming fast in both directions.

I am also able to print to the 7 machine with a cheap HP Officejet 5610 which is not even designed for network printing, as an HP tech had informed me. The printer has to be set up in "Search for a Printer" just like any other. I does have the limitation of not being able to two-sided printing. A better printer like the HP 6500 is a network printer and even has the drovers for XP x64!

Well i faced the same problem. Tried all the stuff like enable file sharing, setting same workgroup, ...etc. Nothing helped but this:
I noticed that there is a multiple number of network adapters in Device manager. All were hidden so one must click View and enable hidden devices. all of it were named something like ...4to6 adapter. When i removed all these adapters my file/printer sharing and networking with XP clients starts working after reboot. If there is a huge number of these adapters you have to remove it all. It can be done using appropriate (32 or 64 bit version) tool DEVCON.EXE (which is part of Windows Driver Kit - Download details: Windows Driver Kit Version 7.1.0). More can be found here The DevCon command-line utility functions as an alternative to Device Manager.
This i have found here microsoft 6to4 adapter and solution is here Automating "6to4" Adapter Removal in Windows - RyanVictory.com - thank you Ryan.