"As I mentioned, I set up a Workgroup"
Any machine from XP or earlier is automatically assigned to a Workgroupd - either "WORKGROUP" OR "MSHOME" depending on how the machine is set up. You can override this and use another workgroup name if you wish.
You can network multiple workgroups together if you like, as long at they have the compatible IP address ranges and subnet masks. Doing so complicates things and makes network discovery slower, but its not essential.
On a pure Vista or Win7 network, workgroup names become almost irrelevant as TCP/IP is the predominant way of finding a networked machine. There are workgroup names buried down in the system, but they are fairly irrelevant
Setting up the laptop in the way you have, suggests that its running WindowsXP. Its found the machine across the network and installed a driver from the preinstalled windows collection. You'll sometimes find that XP will do this automatically without any user intervention.
However if the laptop had Win Vista or Win7 installed that would not have worked - you would have to use the TCP/IP port creation method I mentioned earlier. What usually happens otherwise is it connects for that session, and then loses the connection on reboot