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From what you describe, the Win98 SE PC can view and share files located on the WinXP PC, but it cannot access the shared printer on that PC.
I would first look at the printer's configuration on the XP PC to make sure that Win98 SE printer drivers are installed (on the XP PC), and that permissions allow the Win98 user to access the WinXP printer. For example, select the printer from the WinXP Printers control panel, and pick the Sharing tab, then click Additional Drivers and make sure that Win98 is present and checked. If you do not spot the problem, you may wish to delete and re-add the WinXP printer so that XP and 98 drivers are re-installed.
Then look at the Win98 system's Network control panel, examining the Client for Windows Networks and Printer and File Sharing properties to make sure that both file and printer sharing are enabled. Try using the "nbtstat" command from an MS-DOS window inside Win98 to learn more information about what Windows can actually view and access on the XP PC.
Finally, these hints from Microsoft are not directly related to shared printers, but may be worth consideration: "If you can print from a command prompt but not from any Windows-based program, there may be a problem with the spool settings or with bi-directional communication. To determine if this is the cause of your issue:
1. Click Start, point to Settings, and then click Printers.
2. Right-click the printer you are trying to print to and then click Properties.
3. Click the Details tab, click Spool Settings, then click the Print Directly To The Printer.
4. If your printer supports bi-directional communication, click Disable bi-directional support.
5. Click OK, and then click OK again to close Print Properties.
6. Try to print from Notepad or WordPad.
7. If you can print from Notepad or WordPad, try different combinations of spool settings and bi-directional support until you find a combination that works."
Other Microsoft Knowledge Base entries that may help you:
How to Troubleshoot Network Printing Problems
Troubleshoot Printing Problems in Windows 95, Windows 98, and Windows ME
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