1. XP is not a good "server" OS.
2. The "conflict" you wrote about may continue since the machine is what it is. i.e. "not a server."
It may take time for you to learn the 2 items I offered are true and many do have success but you have reached the point you want better. Let me share my personal server is not a frankenmachine and does not run XP.
Bob
So, the situation is network storage. I have a tower I built from spare parts (probably mostly from 2004) which I put a 250GB external HDD in as it's primary drive, loaded Windows XP on it and connected it to my wireless router. All of my laptops connect to this tower (aptly named Frankentower) to pull and put media and data on (music,movies,pictures). Its been through the network setup wizard and file sharing is on for all computers connecting.
Last night Frankentower would not show up on the network nor Logmein. It was powered and connected. So after an hour of troubleshooting it claimed PCI port 2 had a conflict which is the Ethernet card. This card didn't come with the machine and I had to locate drivers for it. Anyway, I moved it to slot four and reinstalled the drivers. The conflict was gone and it would appear on logmein. However, when I tried to pull off of it to a connected laptop I could only pull one item at a time. If I pull more than one the transfer stops and on the laptop I get an "invalid handle" error (no clue what that is) and on Frankentower the internet dialogue box comes up with network cable is unplugged and severs the Internet connection. All cables are fine.
This issue has been happening on and off but it got better if I just tried later. Later is no longer working. I'm wondering if it's one of three things:
-a software conflict between Frankentowers Windows XP and the Vista/7 I run on the laptops?
-an issue with the router (my router is actually connected to my landlords router/modem)--and if so which point needs adjustment (my router or my landlords)
-an issue with the Ethernet card (which seems to be working fine aside from this) or some Windows XP software preventing network transfers?
I would truly appreciate any help.

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