Cannot ping my own IP- general network sharing problem w/ xp

I am trying to set up vista basic home for the first time to connect to
Windows XP machine. I cannot ping myself or see share contents between
machines. I can connect to the internet on all machines.

From vista machine I can:
Ping 127.0.0.1
cannot ping the ip address I gave my own card (192.168.1.x)
I could not see XP machine on network (until I installed LLTD for xp on xp
machine)
I can ping xp machine IP

On vista machine, network discovery is on, file sharing is one, it is a
private network and password protected sharing is off. I also tested with
firewall off.

From XP machine:
I can see vista machine listed (but not shared info)
Cannot connect or select shared printer (although I can see it)

I have reinstalled network card. Reinstalled LLTD mapper and responder.
Both machines are connected to same switch. Both are set with same subnet
mask, gateway, and workgroup name

I am connected to a linksys switch which is in turn connected to a linksys
router to internet. The older router is not on the linksys list for
non-vista compatible. My ip addresses are both static local 192.168.1.x and
gateway is router IP. The only thing I am not clear on is DNS settings. DNS
is set to what it has always been prior to vista (that of ISP)

In the network map I see my machine and the gateway router.

Incidentally, the client for microsoft networks named service provider will
no stay selected on windows locators ( not sure if this matters)

whew- seems like I have tried everything hmm