Use Windows Networking Wizard and have a close look at the instructions that came with the printer (full manual may be on CD or at maker's website).
Though Win7 does some clever stuff with firewall security, I'd disable the Windows firewall (and any other) on both machines until everything is working. Use Windows Help if you get stuck. Do a Google search for Microsoft's tips on setting up a mixed Win 7 and XP network.
Check this out as well: http://www.tomshardware.com/forum/32700-42-enabling-file-sharing-windows-windows-vista-machines