XP networking is a lot less simple than Windows 7, but it will connect -- just will take more effort. THIS is an obsessively complete guide to troubleshooting a Win XP wireless connection issue, but you may be able to get by with THIS simple guide.
Check the home group setting in the computer running Win XP. The Operating System shouldn't be a matter connecting to the router. Make sure all the devices are in the same work group and if you do the file sharing make sure, it is also turned on.
If still, it does not work, try creating a new Admin user account in that PC and try connecting it to the router.