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they both running XP home it has the Ip as 0.0.0.0
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0.0.0.0 means that naughtiness in Windows has occurred with the attempt to configure the adapter network settings. That is not a valid IP. Look
here for help on that specific issue.
If you are using a router attached to a cable/DSL modem, that is likely the device that is functioning as your DHCP server (what assigns compatible IP addresses automatically on your network). If you are using DHCP, you need to make sure that the network adapters on each machine are configured to use DHCP, then just shut off both computers, reboot the router, and then turn on the computers, and that should take care of it.
If you are manually assigning IPs to each adapter, you must make sure that all the settings are correct and that the computers are on the same network as each other and the router or they can't talk to each other or the router, period.
To make a workgroup, you simply give them the exact same workgroup name in the Properties section of My Computer (Computer Name tab, click "Change" button). You have to reboot the computer after making a change there.
-Skylark