As Joe S has already pointed out, you can't use home groups with down level clients like XP.
As far as the other issue, open the services console by typing services.msc into the search box and hit enter.
Check the following:
Function discovery Should be set to Automatic and Started
Network Store Interface Service Should be set to Automatic and Started
Network Location Awareness Should be set to Automatic and Started
Network List Service should be started a manual setting here is ok, it should start when needed
Network Connections should be started a manual setting here is ok, it should start when needed
TCP/IP NetBIOS Helper Should be set to Automatic and Started
DHCP Client Should be set to Automatic and Started
DNS Client Should be set to Automatic and Started
If you have any issues starting these services (dependency service failed to start) use the dependency tab near the top to determine which other services need to be started first.
Failing all the above, you may be having a problem with a corrupt TCP/IP Stack
Right click on command prompt and choose run as administrator and then type
netsh winsock reset
Keep us posted