Helping people with computers... one answer at a time.
Windows networking is difficult, to put it mildly. I'll walk through setting up a share and connecting to it, and explain why it's not terribly secure.
I have just purchased a laptop that has Windows 7 (Home Premium) installed and I want to share files with my desktop computer that has XP installed. My question is, how do I set up a 'sharing' folder on my laptop so that I can transfer files and folder to it, from my desktop PC.
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For the record, networking sucks.
Sorry to put it that bluntly, but when it comes to making things easy, safe, and secure ... it's just not easy and often not secure.
It's one of the reasons why I actually don't deal with networking issues here on Ask Leo! very often.
However, this comes up often enough that I'll show you exactly what I do, discuss why it's not really secure, and throw out at least one alternative approach that is both easy and secure.
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Particularly in situations where you're running different versions of Windows, I find that the so-called "sharing wizard" gets in the way more than it actually helps.
In Windows Explorer, press the ALT key to get the menu bar to appear if it's not visible and click Tools, Folder options..., click the View tab, and scroll down to the "Use Sharing Wizard (Recommended)" option:

Make sure that it's unchecked and click OK.
The primary concept behind Windows file sharing is called a "share". A share is nothing more than a folder on a computer's hard drive that you "share out" to the network. Other machines on your network can then connect to that share and, depending on the permissions you set up, read and write all the files and folders within that shared folder.
The easiest way to create a share in Windows 7 is to right-click on the folder in Windows Explorer, click Share with and then Advanced sharing...:

If Advanced sharing is not present and things like "Homegroup" are mentioned instead, then the Sharing Wizard hasn't been turned off, as I recommended above.
In the resulting dialog box, click the Advanced Sharing... button.
In the next dialog box, make sure that Share this folder is checked:

As you can see, you can set a share name that is different than the folder name if you like. I find it easier to leave the name the same as the folder name. You can also add comments to describe the purpose of this particular file share.
Now, click the Permissions button.

By default, "Everyone" can only read the contents of the folder that you're about to share. Users on other computers who connect to this share cannot alter or add any files or folders. If that's all you need, click OK on all the dialog boxes that got you here - you're done setting up your share.
If you want other computers to be able to write to this shared folder, then click the Allow checkbox for Full Control. Once again, OK your way back out - you've set up your share.
Note that any machine on your local network will be able to access the contents of this folder. As you can surmise from some of the options that I've skipped over, there are techniques to restrict access, but those techniques are where things get complicated and quickly break. At home in what we can assume is a network of essentially trusted users, I strongly recommend keeping things simple.
On the remote computer, there are naturally a couple of ways to connect to the share that you've just created. I'll use Windows XP as my remote, but the fundamentals are the same in Vista and 7 as well.
In Windows Explorer, expand My Network Places, Entire Network, Microsoft Windows Network, your machine's workgroup name, the name of the machine on which you created the share, and you should see a list of shares:

Right-click the share and click Map Network Drive...:

Select the drive letter that you want that shared folder on the other machine to appear as and click Finish. In this example, Drive "Y:" on our Windows XP machine is connected to the ExampleSharedFolder that we created on the Windows 7 machine.
I've found "Network Places" to be problematic at times, so instead of navigating through all of that, you can also just click on Windows Explorer's Tools menu, and the Map Network Drive... item there:

In this case, the second field, which was filled in for us before, is now empty. Type in "\\" followed by the name of the machine that has the shared folder followed by "\" and the name of the share that we created. In our example here, that would be \\Notenquad\ExampleSharedFolder. Select a drive letter, click Finish, and once again, the local drive letter on this machine now refers to the shared folder on the other.
Finally, I wouldn't be true to myself if I didn't tell you what I
really do. 
In a Windows Command Prompt, I'd type in the following:
Like the prettier UI above, that connects the drive letter Y: to the remote shared folder.
What I just described is exactly what I do on my home network, but there are risks.
Any machine that successfully connects to my home network has access to all of the shares that I've created that way. You might even have noticed a drive "C" in an example above, which should send security concious readers running away screaming, because they'd correctly assume that I've shared out my entire C drive (with full control, no less).
That would be a security nightmare if I didn't explicitly trust every other machine on my network.
The problem is, as I alluded to at the very begining, networking correctly and securely - particularly in a small home network - is extremely difficult and error prone. The net result is that I've taken the lazy way out, because I can get it to work.
I'm both ashamed that I would do so and frustrated that I would have to.
So my caveat to you is simply this: be careful. Understand the security ramifications of opening up a share to "Everyone", particularly if they're also given "Full Control". Be selective of what you share; for example, do as I say, not as I do, and don't share out your entire system drive.
If all that you want to do is move files between machines, consider using a service like Dropbox or some of its competitors. Dropbox is both simple to install and configure and makes moving files around quite easy.
Article C4985 - November 15, 2011
Two poducts that I have had nothing but "JUST WORKS" experiences with:
Posted by: Sam77 at December 17, 2011 9:48 PM1) "Targus High-speed File Transfer Cable" - about $30 - USB to USB - I have NEVER had this not work. Google it.
2) Cisco's "Network Magic" (software). Try the trial version. I paid $24 for one-year (for I believe up to eight computers) and will pay it again next year. It just FIXES your network connections...it just DOES! (I have had ALL the frustrations expressed in this article and reader's comments). In fact, after uninstalling it from my laptop, whatever it fixed...stayed fixed (I won't go into why I uninstalled it - not important here).
I've had a mix of Windows XP, Windows 2000, Vista and (now) Windows 7 computers on my home network (as members of WORKGROUP), and never had a problem until I replaced a failed WRT54G with an E3000. Forget shares - most of the time dissimilar computers can't even see each other. When they finally appear (as much as a day after being rebooted) the shares don't work, even where the same account credentials exist on both machines. Clearly, there's an issue with discovery; if everything stays up long enough all the shares work eventually, but I can't depend on having them available. Curiously, all the machines can see the Z: share on the thumb drive connected to the HP C309g-m printer/scanner, but that's too slow and will fail eventually. My long term solution was to attach and old 500G USB drive to the E3000, and add a BlackArmor NAS (which I highly recommend) on one of the E3000's gigabit connections.
Posted by: JeffInTampa at December 21, 2011 7:41 AMI found this article very helpful, entitled:
"HOW TO MAKE WINDOWS 7 WORK WITH OLDER VERSIONS FOR NETWORKING AND FILE SHARING" at:
http://social.technet.microsoft.com/Forums/en-US/w7itpronetworking/thread/033c418b-1096-4df7-bfad-fd3d431f3cd5
See ESPECIALLY Step 4.
Posted by: Sam77 at February 27, 2012 7:42 AMHi Leo
Love your site - has got me out of trouble quite a few times.
I agree that Windows Networking is a mess! Why do they have to make it so difficult, and make the error messages so uninformative?
I have a new Win 7 Pro 64 bit laptop which I am trying to network with my XP Pro SP3 desktop - specifically, to share the drives of each machine with the other.
This mostly works OK, but when I try to use the XP machine to delete or create a directory on the Win 7 machine I get the old "Access is denied" message.
When I try to save a test .txt (Wordpad) file from the XP machine into a pre-existing folder on the Win 7 D drive, I get a message saying something like "You do not have permission to do that. See an Administrator".
The networking is set up to require password access to the Win 7 D drive, and the account (user name and pwd) I enter is configured as an Administrator on Win 7. In fact, turning off the need for user name and pwd doesn't seem to make any difference - it still doesn't work.
I've followed all the instructions in your article, to no avail.
Doing a Google search on this issue brings up hundreds (if not thousands) of results. Some people advocate using the Registry editor to make adjustments, others say use the Security Policy utility to make changes (probaly also edits teh Registry).
Have (nervously) tried a cpl of those things, with not improvement (and the put the Security Policy parameters back to defaults).
There must surely be a way of getting Win 7 and XP machines to network properly... I thought MS had learned from the disaster that was Vista and that Win 7 would work properly in a basic, basic function such as this... apparently not.
Is there any solution you know of? Or is there a low cost alternative to Windows Networking (maybe from Novell?). MS rather unhelpfully state "There is no alternative to Windows Networking" - see http://answers.microsoft.com/en-us/windows/forum/windows_7-networking/alternative-to-windows-networking/22987407-9e7d-4500-9e37-63b906f85de2 Could this be a coercive tool to get people to upgrade from XP to Win 7? (which is itself a tortuous process if you haven't already 'upgraded' to Vista, I believe).
All help welcome! Thanks.
Posted by: Paul Hutchison at March 2, 2012 8:15 PMOne more thing:
I've read the article at:
http://social.technet.microsoft.com/Forums/en-US/w7itpronetworking/thread/033c418b-1096-4df7-bfad-fd3d431f3cd5
and followed all the instructions. I changed the Security Permissions to Full Control for everyone, even users of the Win 7 machine itself (NB I was working with the Permissions for the D drive, not a folder on it - and there was a lot of drive activity as it went through and change the Permissions for all the folders on the drive, I assume).
I was hopeful...but my hopes were dashed. Still no ability to create/delete folders on the Win 7 D drive, still unable to write a file to an existing folder on the Win 7 D from the XP machine.
Aaarrrrrrrrhhhh!!! I've wasted HOURS on this!
Don't really want to have to put specific files into a public folder to move them across, I just want to be able to use the Win 7 laptop as a file server from the XP desktop so I have all my files there when I go out and about.
I guess I could use an external USB HDD plugged into the XP machine (which I think would be accessible from both of them), but it seems ridiculous to have to do this, run down the battery on the laptop with an external HDD etc.
In desperation, I considered calling Microsoft. After entering the product I/D of my copy copy of Win 7 I was told that it is an OEM copy and that the computer manufacturer would be the ones to help.
Called Lenovo tech support. Initially they didn't want to know ("Hardware support only"), then agreed to take a look using remote access.
Half an hour later, no solution found, give up...
I guess that MS will talk to me about it for a fee, but that just seems wrong as the machine (and therefore the copy of Win 7) is very new.
I've been loyal to MS and Windows all these years (and I love all my Thinkpads) but it makes me think about Apple... (or would this basic requirement be just as difficult and convoluted to implement there?)
Please, someone, tell me there's some easy way of fixing this.
Frustrated rant over :-)
PS Could I put the entire Win 7 D drive into the public folder? Seems crazy, but might that work? Reluctant to do it just on a whim as there is over 100GB of data involved.
Posted by: Paul Hutchison at March 2, 2012 8:38 PM