This is set up to be a simple Peer to Peer network. The same basic setup that has worked nearly flawless for over eight years in a complete XP environment. New machines have been added over the years with XP without any problems at all. The problem has come with adding Win7 machines to the network, a HUGE mistake, not of my doing. Had I been asked the new machines would have been XP and I would not be writing in this discussion.
Once again MS has screwed the public. They profess that this works, but many hours of searching the web had proven the opposite. From what I can gather networking works better if you buy the ultimate version of Win7, kind of dumb that it is not so with the pro version that is meant for business environment. Don't know this for sure just read it. Also Win 7 networking works much better with a Win 2008 server, can't see going there for the cost. So the bottom line is this, from my experience and all that I have read in five days of searching. Win7 to XP might work for you in some cases, but not all. There seems to be no rhyme or reason as to when it will and when it won't. Some tweaks work for some folks while not working for others. I did read but did not try, that some folks are having luck with using IPX/SPX to connect with. The indication being there are problems in the TCP/IP stack between the different versions.
As this has been going on since last Friday in an operating office, I just returned from that office after installing Win7 on all the computers at a cost of over $550 for four copies of Win7, not to mention the cost of my time to do it. This was the customers choice, mine was to put the three new machines back to XP. When I left everything was up and running. Time will tell if it work as well as XP has in the past.
It is a real shame there is not another company that produces an operating system so you can tell MS to stick it where the sun does not shine. In every new operating system MS has come up with there has always been issues connecting the previous version to it. I have kept every one of my customers away from Win 7 and will continue to do so.