I could be mistaken but I seem to remember reading somewhere that WinXP HOME will not participate in a workgroup with Win9x systems. It needs to log into a Windows network via an NT based system (NT, 2K or XP systems, but not 98, 98SE or ME). XP Pro does not have this limitation.
"There are no mysteries with computers...just fix it you idiot!" (R. Warren 1909-1990)