You need to disable Simple File Sharing on the XP machine, so that W7 machine can mitigate permissions. Follow instructions from the resources below and you will be able to accomplish this.
http://www.howtogeek.com/howto/windows-7/share-files-and-printers-between-windows-7-and-xp/http://windows7forums.com/windows-7-networking/2510-windows-networking-fixed-windows-7-xp.html