I've seen XP mess up like this at client sites even when on a more "real" network (switches, routers, etc). A few things to try:
1) Go into your network connections and right-click the LAN setup there. See if you can connect it that way.
2) Unplug the cable, wait a few seconds, and plug it back in.
3) Try booting one machine before the other (experiment a bit there).
Yeah, things _should_ just work, but who knows... it happens sometimes.
Oh, another thing to check for.. Make sure the workgroup hasn't reset back to a default that isn't the same as the other computer (yeah, I've seen this happen once, but only once). You may also want to manually set their IPs instead of having them auto-check for a DHCP server or specify their own.
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