Some progress, then. Good.
So it's probably down to Permissions and Sharing now.
Ensure the Guest account is enabled on both units and that you are "sharing" the Drives and Folders you want each to see on the other.
Disable any Firewalls or enable access for the IP addresses you are using.
WinXP is paranoid about restricting access and permissions by default, so you have to do a lot of right-clicking on properties and permissions to grant the privileges you need to make the system work. Personally, I give all permissions to"Everybody". But then the Networks I deal with can handle that kind of Open House environment.