Make sure you are trying to use the Crossover Cable (should be RJ45 Ethernet Cat5 or Cat6) between the 2 Ethernet ports on the XP computer and the other computer (Win7). It sounds like you know the correct ports, but back in the Win98 days many of my customers tried hooking up between the 2-RJ11 jacks which are for Modem-Phone ports.
That will not work; there were also Serial Port Cables for computer-to-computer connection (DB-9), and there were special crossover cables used for those. Just want to make sure you are talking about using Ethernet ports which came built in on just about all laptops and desktops by the time XP showed up!
BIGBEARJEDI