XP pro / XP home network misbehaviour

[sabex]

Both machines are on the same workgroup and are physically connected
with a router.
I can 'see' the shared folders on each machine and I can browse those
folders. I can create files on the other machine's folders and I can
copy files to the other machine's folders.
I can't read files on the other machine's folders, that I did not
place there.

I am using SFS, all other connections are great.
The sharing is set up "allow network users to update my files" is
checked.
Its obviously a permissions thing, but SFS is supposed to bypass all
that.

When I view the folder settings, the read only attribute is got a grey
check mark which won't go away, but all the files are unchecked...

I am running Norton Firewall. When its disabled it makes no
difference.

I am up to date on all the Service Packs on both machines...
Anyone have any ideas?

 

[sabex]

sorry I should have said before...
Error message reads:
cannot copy filename: Access is denied
Make sure the disk is not full or write-protected and that the file is
not currently in use.