1. Run Network setup wizard (control panel) from XP SP2 to configure it for network sharing. Click on next(s) while setting the computer name and workgroup name (default WORKGROUP)
2. Vista: Control Panel->Network & Sharing centre.
Make the network type of your = Private.
Turn "Network discovery" On.
Turn "File sharing" On.
Turn "Password protected sharing" Off.
3. Make sure workgroup name in both machines is the same. (My Computer -> Properties -> Computer Name)
4. Make sure Firewall settings allow file and printer sharing as exceptions.
XP : Control Panel -> Network Connections -> -> Properties -> Advanced tab -> Windows firewall settings -> Exceptions tab.
Vista : Control Panel -> Network & Sharing centre -> Windows firewall (left) -> Change Settings -> Exceptions tab.
5. Check for Norton anti-virus firewall settings. It restricts file-sharing. Google it out.
6. You might (not necessarily) need to install LLTD Responder (search for "Microsoft KB922120 download") on your windows XP machine for its network discoverability to vista.
7. Hopefully now both computers are visible to each other. And you can share directories by directory-> Right Click -> Sharing.
