I.  Configure your computer for file sharing
You will only need to configure your computer for file sharing once.

1. Click on the Start button, and then select Settings > Control Panel.
2. Double-click on the Network icon. In the window that appears, make sure the Configuration tab is selected. If you do not see the Network icon, click on the view all Control Panel options link on the left side of the window.
3. In The following network components are installed: section, if you do not see File and printer sharing for Microsoft Networks listed, then:
4. Click on the File and Print Sharing button.
5. In the dialog box that appears, check both boxes.

1. Click OK.
2. Next check the network Identification tab and make sure that your computer has the same workgroup name as the others in your network.
3. Then click OK and  you will be asked to restart your computer. Click Yes to restart. The computer will automatically restart.

File sharing is now available on the computer.

Make sure that your that the two computers are in the same Workgroup. 

Windows 2000/XP – Right-click your MY COMPUTER icon and select PROPERTIES.  In XP click on the COMPUTER NAME tab, in 2000 click on Network Id.  Click on the CHANGE button and make sure that they both use the same Workgroup name.

Windows 98/ME – Right-click NETWORK NEIGHBORHOOD and select PROPERTIES.  Click on the Identification tab and ensure that both computers are in the same workgroup.  Change the workgroup name to match the other computer if needed.
II. Setting up the folder that will be shared
To specify a particular folder you want to share, follow these steps. These steps can be repeated for multiple folders if, for example, a certain folder must be shared with only one group of people and another folder with another group of people, using different passwords. Note: Only folders may be shared, not individual files, i.e. if you wish to share a file named blue.doc, then you must put blue.doc inside a folder and then share that folder by following the directions below.

1. Locate the folder to be shared.  If you want to make a new folder, follow these instructions:  Right-click on a blank area of your desktop, and select NEW – FOLDER.  You should now have a folder on your desktop named New Folder.  Right-click the folder and select rename.  Rename the folder as “Backup”.
2. Right-click on the backup folder and choose Sharing from the menu that appears.

1. In the Sharing tab, select Shared As.
2. Folders have 3 possible levels of access to choose from.
1. Read-Only - allows others to read, but not make changes to the folder. If you select this option, choose a password for the folder and type it into the Read-only Password: field.
2. Full - gives others full access to the folder--i.e., they can both read and make changes to it. If you select this option, choose a password for the folder and type it into the Full Access Password field.
3. Depends on Password - If you want some people to have read-only access but others to have full access to the folder, you can maintain two passwords, one for read-only access and the other for full access. If you select this option, choose two passwords, and type each password into the appropriate box.

Note: The passwords show up as strings of *s; this is just for security, and the actual passwords are whatever you typed in, not strings of *s.

1. Click OK.
2. Windows will ask you to confirm the passwords so make sure to take note of them and keep them in a private place.
3. The folder icon will now change into a folder resting on an arm  indicating that it is being shared.

The computer will now appear as an icon in Network Neighborhood for Windows 98 and in My Network Places for Windows Me/2000/XP on any Windows PC on the network. Its name will be your username, unless it's been changed it to something else. Anyone who knows the password(s) will be able to access the folder(s) set up for sharing, so be careful about giving out the passwords. Make sure the users who are given the passwords know the importance of keeping them secure.
Windows XP – Is a little bit different, so go to this link for information on “How to Share and Set Permissions for Folders and Files Using Windows XP” http://www.microsoft.com/technet/prodtechnol/
winxppro/maintain/filesharing.mspx
Simple File Sharing is enabled by default on Windows XP Professional systems that are members of a workgroup (typically used in small networks) rather than a domain.  There are no passwords or access restrictions and everything that's shared is accessible by everyone on the network.  Simple File Sharing is the only type of sharing available in Windows XP Home Edition.
By disabling Simple File Sharing, you can specify an Access Control List (ALC) for each shared disk or folder. The ACL specifies which users are allowed to have access.

To turn Simple File Sharing off in Windows XP Professional, follow these steps:
1.         Double-click My Computer on the desktop.
2.         On the Tools menu, click Folder Options.
3.         Click the View tab, and then find “Use Simple File Sharing (Recommended)”.  Uncheck the box to turn off Simple File Sharing.