Make sure they are in the same workgroup. I believe XP Home defaults to MSHOME and MCE defaults to something different.

Can you ping the desktop from the laptop?

Can you search computer via IP address from the laptop?

Can you add new printer and use \\<MCECOMPUTER>\<PrinterShareName>

MCECOMPUTER = the hostname of your MCE computer
PrinterShareName = the share printer name that you gave the printer

Do you have Windows Firewall enable on either computer? How about any firewalls at all, like McAfee Personal Firewall or Norton Internet Security.

Disable them temporarily and give it a try.