Did you check the firewall? Most common source of problems for things like this, is an improperly configured firewall. Kind of a catch-22 situation... Few know how, or even want to know how, to properly configure a firewall, yet it's an essential skill to remain safe on the Internet which is something everyone wants. Few even stop to think that the firewall might be the problem.
Also, rarely does upgrading to a new version of an operating system or any other program, fix some existing problem with a current installation. Most of the time, it just makes things worse. If there's some feature offered in Vista that would be very worthwhile to you, then by all means upgrade. Otherwise, what exactly is the point? I'm not one of those Luddite types who spout the "If it ain't broke" mantra, but I like there to be some point to my spending money on something besides it being shiny and new... Because sooner or later, it won't be so shiny or new, and then what are you left with?
So, I have the option to use remote desktop to access other pc's on the LAN, and I do so. The only thing is, whenever I turn around and try to access this one via RDP it won't let me. I've checked and I have Terminal Services enabled, so I'm not quite sure what to do.
This computer is running XP Home, and all other computers on the network run XP Pro.
Also, would there be wisdom in updating to Vista? Or should I stick with XP until the MS Lifecycle runs out?