By default XP uses MSHOME and Vista Uses WORKGROUP as their respective network names. On the XP machine go to control panel and run the network wizard. Change the network name to workgroup and make sure File & Printer sharing is on.
In the Vista machine go to Network and Sharing Centre from Control Panel. Under Sharing and Discovery you`ll need to switch most of the options to On.
You also need to have passwords set for all user accounts on both machines. Reboot both machines and look in the workgroup network.