If you want to share folders between XP and 7 you should be using the Public folders.
You don't need to mess with the NTFS permission settings or passwords at all this way so using the Public folders is a much easier and secure method for sharing.
Sharing the main Public folder also share's it's subfolders.
Just go into the Public Folder at C: Users>Public> Sharing tab and set to share with Everyone read/write, apply setting hit OK.
This will instantly share that folder with everyone in the workgroup and the Homegroup if you have one set up.