Originally posted by Admiral LSD

The above is an example of what not to do people. NT is set up the way it is for a reason, it 9x that's brain damaged in this area. Keep the security policy the way it is and simply create an account for the 9x box in the XP box.
Not really since it simply allows you to have guests connect to your computer. If you don't want that, you can still disable guests from connecting to you computer using less obscure ways.
If you're going to be using simple peer-to-peer home networking, that is the way you would do it.
And 9x isn't so much brain damaged here but that it's trying to log on as a guest. It's perfectly possible to tell it log on properly, but assuming he's behind a NAT, it's not really necessary.
Moreover, win2k wasn't set up this way. This is specific to winxp.
Now as for your win98 box. Switch "Primary Network Logon" to "Client for Microsoft Networks"
Then make sure it's set to "share level access" in the Access Control tab.
This will enable a simple networking method that should be more than enough for a neat little peer level network for the few computers you probably have at home.