XP home edition networking

Sounds like a firewall issue even though you say there are none.

Check to see if you have the guest account enabled on the xp box. On your xp machine go to run type msconfig then go to the services tab hide all microsoft services and check to see what services are running If you have norton\symantec products try unchecking script blocking services, pass validation, anything that has to do with networking(norton\symanctec) restart your machine and everything should be fine.

can you ping each other? do you have link lights?
what does ipconfig and winipcfg have to say? do you have a share set up on each so you have something to 'see'? this is not a home edition issue. did you use the network wizard in xp to help you set up the me box?

you must be able to ping each other before it will work. well, i am pleased that you understand ipconfig as a double-check of the settings. you did not give complete info however. what subnet mask? what gateway? good luck. no more time for you...

We have found that XP machines should be able to see machines with a lower version of Windows, but lower version windows machines cannot see XP machines. If I remember in ME on your network settings, you have client for Microsoft Networks, the Identification tab, access control. All of these need to be set correctly.

My experience is they should both be able to "see" each other. It is odd that ping it not working as it is "insensitive" to other things, like workgroup, etc. That could indicate a hardware problem. Have you checked the hardware some how? Maybe a faulty cable, these things are hard to troubleshoot if you don't have another box on the network. Also, some notes I have found with older windows. You need to be "logged in" in the 9X box. You can't just escape into the system. Also make sure the workgroup name is the same on both systems. I don't think the subnet mask is a big difference but I set mine to 255.255.255.0. Anyway, these are the best ideas I can come up with. I have had bad NICs that still turned on the lights. Also, I just had to reinstall XP on a customers system which would not access my network no matter what I did. With the clean install everything is running fine.

check under the local area connection properties, tcpip advanced tab and make sure you dont have the firewall checked.

Windows versions prior to NT/2000/XP often used NetBeui protocol for browsing/sharing of files. XP Pro has this available, but XP Home does not. However, it IS on the XP Home Cd under the "X:\VALUEADD\MSFT\NET\NETBEUI" directory.
If you go to your Nework Connections and select the NIC card you're working with, add the NetBeui protocol to it, reboot and you should now be able to "see" the shared folders on both computers.
(I'm assuming here that you know how to get to the properties of the NIC where Tcp/IP, etc protocols are so you can add NetBeui.)