I sympathize. Setting up a simple ethernet connection between two machines
was really awkward. I went round and round setting and resetting all the
options, then suddenly I saw the peer machine icon pop up in the list of
discovered hosts. Bizarre! Infuriatiating!
I don't know what I did to make it work. I ran the set up home network
wizard on my XP machine several times. Sometimes that would result in the
Vista machine being recognized, sometimes not.
You might try mucking about with the WINS configuration of the TCP/IP
adapter. By default it is supposed to kick in when required, but I have seen
various posts suggesting it needs to be set explicitly.
In my time I have set up and managed complicated global networks, yet
setting up a simple one-to-one workgroup with a single ethernet crossover
cable was pound for pound a much greater challenge.