The new copies of XP coming out with sp2 on them have the firewall default set as on.
You need to go to the control panel--->network connections--->right click Local Area Lan select properties next window has 3 tabs at the top --select advance
then click setting for firewall and set it to off. Your router will handle this function
When you reboot the two should see each other.
The activation feature shouldn't "enter fear" with your connectivity
