someone with more network experience can help more I am sure but I think you may be missing 2 things:
1) you need to SHARE the harddrives on each machine
- in xp click on my computer, rmc (right mouse click) on the harddrive, click on share&security, click on sharethisfolderonthenetwork. when you go back to my computer you will see a hand under the harddrive pix if it took.
2) you must turn on network discovery so computers can see you
- in control panel, click on network connections icon, see if u can find network discovery on/off..... I dont remember how to find it. perhaps instead you could run the network setup wizard and it will set this stuff for you?