No, in theory you should not be able to because you are
misunderstanding the nature of the incoming connections limit.
The limit is on *connections* not *computers*. Each computer can
make more than one connection and in your case, obviously does.
You need to either replace the XP Pro on your pseudo-server with
a real Microsoft server operating system or - if the box is only
acting as a file server and not running Windows programs - you
could replace XP Pro with Linux which has no incoming
connections limitation.
http://support.microsoft.com/?id=314882 - Inbound connections
limit in XP
Expanding on your response.
Quotes from the cited KB article:
Quote 1: "For Windows XP Professional, the maximum number of other
computers that are permitted to simultaneously connect over the
network is ten."
....
Quote 2: "All logical drive, logical printer, and transport level
connections combined from a single computer are considered to be
one session; therefore, these connections only count as one
connection in the ten- connection limit. For example, if a user
establishes two logical drive connections, two Windows sockets, and
one logical printer connection to a Windows XP system, one session
is established. As a result, there will be only one less connection
that can be made to the Windows XP system, even though three
logical connections have been established."
So for file & print sharing, 1 computer = 1 session. But...
Quote 3: "The only way system A will have multiple sessions to
another system, system Z, is if system A is running services that
create logical connections to system Z. For example, if a user is
logged on to system A as guest and a service is running on system A
under the user1 account, and both the user and the service (as
user1) establish connections to system Z, two sessions are
established. Each logon session that uses the Server service counts
against the connection limit. "
Summary: 10 PCs can each share any number of resources on a single
XP Pro server, but it looks like the OP also has something running
on the client PCs that fits Quote 3.
Quote 3 is somewhat less than transparent to me - perhaps someone
could give a practical example?