connetion problems

ok I downloaded and installed it easily… when creating a network and then my friend joining my network… it says “connecting” near his name.
I cannot ping him or myself… any ideas? … me using Vista 32 bit SP2,
him XP SP2 can ping himself only.

My firewall is turned off, I have AVG free antivirus and I exit it after starting my computer
any other stuff I should do? coz we are testing it from the same room… so the main difference is the operating system
any ideas?

EDIT

I switched the usernames and logged in… it worked fine… switched them back and now it works fine… dunno why.
But I still cannot ping him and he cannot ping me. each can only ping himself now.