Home Networking Problem Between Win 7 & Vista PCs

I just bought a laptop with Win 7 Home Prem 64 bit installed that is wirelessly connected to my router. I have another desktop with Vista Home Prem 64 bit wired connected to the router. I was trying to set up home network from my laptop and it gave me a password. After that I could see my desktop in my laptop under Network but whenever I click on the desktop, a popup asks for user name and password. The password that my laptop provided doesn't connect to the desktop saying "wrong pass". I can also see my laptop from my desktop but can't communicate. Both the comps are running under Administrator accounts and doesn't require any login/pass to log into them. Please note that I don't have any problem with accessing the internet. I would appreciate it very much if someone could tell me how I could set up a home network between the two to be able to share files. Thanks!

Good call Redbirddad, the fact that he needed to use a password to connect probably means he tried to use Homegroup for sharing between his Win 7 and Vista machine which won't work. He needs to set up either Work or Public file shares.

As for the user password prompts, it usually helps if you turn on or off password protected sharing in the Home and Work advanced sharing options. Toggling between the two settings will change this behavior.

Thanks! I made changes as per chev65 in my laptop and will make changes to desktop as well and see what happens.