XPs built in firewall (ICF) may be the limiting factor. Try turning it off on both PCs.
I have a desktop running XP Home connected via ethernet cable to a Microsoft MN-700 router/access point. I also have a notebook running XP Home with a wireless connection to the network. Both computers can connect to the network just fine. File and print sharing is enabled on both and the workgroup name is the same on both computers, yet when I'm on one computer and both are on the network I can't see the other computer. Any ideas on what the problem might be?