harder than it needs to be - homegroup is nice, but it's relatively a new tech, and I wouldn't recommend between just two pc's.
Easier method would just to share one folder on the C drive, under advanced sharing set the permissions to an account with a password instead of "EVERYONE group". and go from there.
Leave share permissions alone, and just limit who can use it via NTFS. That is, if you want to do it that way.
Hope this helps clear the muddy water.
Homegroup is a nice security feature in that it limits just anyone from joining the same workgroup as you and siphoning all your files.