See my previous posting.
news://msnews.microsoft.com:119/e#tTQGnvFHA.3756@tk2msftngp13.phx.gbl

I have a similar problem. The above link is the result of my
research.

As long as you can attach to the internet from both
computers, it is likely your network hardware is working,
and your tcp/ip settings are good, leaving only the feeble
Win98SE part of the peer-to-peer LAN as culprit.

I have made two tweaks to the above posting. 1) I set LM
Announce to NO, and 2) I set all computers to Browse Master
ENABLE. I also usually get all computers to behave
(recognize both other machines on the LAN and the workgroup)
by rebooting all machines more or less simultaneously.
I do not use a username/password and this does not seem to
cause a problem.

One of my machines is XP Pro. Not much to tweak there. It
seems to be the most well behaved.I will assume that XP Home
uses "simple" file management settings. Go to the XP
networking newsgroup for information on settings.