Make sure that the Software Firewall on each computer allows free local traffic. If you use 3rd party Firewall On, Vista/XP Native Firewall should be Off, and the active Firewall has to adjusted to your Network IP numbers on what is some time called the Trusted
Zone (consult your 3rd Party Firewall instructions
Please Note that some 3rd party Software Firewalls keep blocking aspects of Local Traffic even it they are turned Off (disabled). If possible configure the Firewall correctly, or totally uninstall it to allow clean flow of local network traffic.
Since your computers are running Win 7 and Win XP you have to use the Work network option.
Windows XP patch for Sharing with Vista (Not need for XP-SP3) - http://support.microsoft.com/kb/922120
When finished with the setting of the system it is advisable to Reboot all the hardware including the Router and all computers involved.
*Note. Some of the processes described above are done Not for Windows sake but to compensate for different Routers and the way their firmware works and stores the info about the computers that are Networked.
Jack, MVP-Networking. EZLAN.NET
Jack MVP, Microsoft Windows Desktop Experience-Networking.