DEAD,
I've personally encountered this problem a whole bunch of times.
What Ive found out in my numerous tests is the following:
Disable all firewalls protecting your network,this includes XP's and especially if you have something like Norton Netshield or another antivirus installed that monitors your network or acts as a shield.
If you're playing through a router and not a direct modem or link,read the documentation and disable the appropriate port on your router.
Also,it will not work if one pc (the host is setup to auto obtain the ip address it uses,specify it )
I think one of those should solveit.
Remember:If you build it they will come LOL