Windows XP – Home edition computers always have Simple File Sharing enabled and Windows XP Professional computers have Simple File Sharing enabled by default but it can be changed to Advanced File Sharing. Advanced File Sharing capability of Windows XP Professional turns the computer to act like File Server because you can control file permission. File permission means that who can access the share folder and who can’t. That decision will be absolutely on you. In the case of Windows XP Home, you don’t have such control. Anybody can access the shared folder.
As I said, Advanced File Sharing is not enabled by default in Windows XP Professional so you should have to enable it before you could use your computer as File Server.
Enable Advanced File Sharing
Go to Start -> Control Panel -> Folder Options and uncheck Use Simple File Sharing under View tab.
Share folder with permission
2. Click to select the Share This Folder check box.
3. In the Share Name box, enter the name of the share.
4. Click Permissions, and then edit the list of users who have access to the share. You can give each user or group full control of the share; permit them to change, or just read files.
Note: Don’t forget to remove Everyone from the permission.
More Reading: Windows XP Networking : Sharing in the Home Office