Windows 7/Vista use a network discovery protocol called Link-Layer Topology Discovery (LLTD) in order to query the other devices on the network to determine how the network is organized. In a convincing demonstration of incompetence
<g>, Microsoft unfortunately left the LLTD responder out of Windows XP SP3, and they did so even though Vista was released on 11/8/2006, an LLTD hotfix for XP SP2 had been released on 11/21/2006, and SP3 for XP was released much later on 4/21/2008.
For more information see the following article: Network Map Does Not Display Computers Running Windows XP
Note that there are two versions of the hotfix available, one for XP w/SP2 and earlier, and another for XP w/SP3:
To make this even more difficult, in order to get the SP3 version Microsoft forces you to submit a "Hotfix Request" (complete with an exceptionally irritating "captcha
"), after which they will send the hotfix to the email address you supply. The SP2 version can simply be downloaded directly with no requesting required, but everybody should be running SP3 anyway.
Bottom line: The LLTD responder is available as a hotfix for Windows XP and should be installed by default on any XP systems, especially those sharing a network with systems running 7/Vista.
I haven't seen LLTD related problems on any of my personal or client systems because all of my XP installs have had this update integrated since around the time Vista was released. You can integrate updates and hotfixes into XP installation sources manually
or with an easy to use tool like nLite