For the record, I achieved a victory of sorts (my favorite corollary of Murphy's Law is that if you fool with something long enough either you will fix it or break it). I should have realized that if I could ping the other computers on my home network I could also reference them by IP address (thank goodness I use fixed IP addresses on the network rather than DHCP). The solution was to reference the shared folder by its computer's IP address. I could add a Network Place for the shared folder and reference it, for example, as \\192.168.1.105\SharedDocs. Now I have no problem running my incompatible application in XP Mode.
I have to say that in some ways XP Mode still isn't quite ready for prime time.
A month ago I assembled a new computer (after 11 years with the old machine that was still successfully running Windows 98 SE). I decided to jump into the deep end of the pool and install Windows 7 from the beginning. As an early adopter, I knew I would be in for some troubles, and indeed Win 7 is a mixed bag, mostly positive but with a few nagging incompatibilities, some of which continue to cause distress and a lot of time and effort in the attempt to overcome.
Many of the incompatibilities are solved by running the offending applications in XP Mode, which is both ingenious and "clunky" for lack of a better word. Basically, you download and install an entire copy of Windows XP SP3 and run it as a virtual machine inside Windows 7. Microsoft has gone to some lengths to make this solution work, although I'd call it still a beta implementation.
I confess that I'm mostly baffled by how shared network resources are handled in XP Mode. I have a small home network (cable modem, router, three other computers running Windows XP, my old Windows 98 computer until it can be retired, and a networked laser printer). After some research, I was able to get the printer to work applications in XP Mode (I'll spare the rant about how poorly implemented this particular process is).
However, I can't seem to recognize any of the other computers on the home network from XP Mode. There is no problem accessing the Internet; Internet Explorer runs well. I joined the home network workgroup by name (it told me I had successfully joined, just as if I were using Windows XP), and I can see the workgroup name but not any of the computer names.
Curiously, I find that I am able to ping the other computers on the network when in XP Mode. However, I am unable to address them by name. Is there perhaps a bug in XP Mode and Windows Virtual PC in terms of resolving network names? That seems unlikely, but why else would I be able to ping them (it recognizes their addresses) but not see their names?
I really want to get to the bottom of this. Any help would be greatly appreciated.