To use the network functionality of Windows, you must first understand the basics of Windows networking.
Network Name Resolution
Since the release of Windows XP, Microsoft has used TCP/IP as the primary networking protocol on Windows networks. However, there are still some leftover features from the days when Microsoft used simpler broadcast-based networking protocols like NetBEUI and NetBIOS. Mainly, these Windows specific networking features include the ability to use short names to identify and share resources like folders, files, and printers on Windows computers with other Windows computers. These names take the form of \\computername\sharename. These resource names are resolved using either a list provided by the Windows Computer Browser Service, a Microsoft WINS server, or by a DNS server that supports such names.
Windows 7 supports this older form of network name resolution for compatibility purposes. However, Windows 7 no longer relies on any of these methods for name resolution. On home-based networks Windows 7 utilizes a new feature called Home Group. The Home Group greatly simplifies connecting home computers with each other while at the same time increasing security.
Connecting to Windows Shares

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Under the Windows XP networking model, users connect to resources based upon "shares" which are created on one computer and then accessed from another one. For example, a user wanting to share music files between home computers might create a share on their My Music folder. This share allows another computer to access those files by mapping a network drive to that share. To do so, the user must have sufficient access or security rights.
Mapping a drive involves choosing a drive letter to be used as the map to the network resource. For example, a user might map their M: drive to the My Music folder share on the other computer. To access the MP3 music files on that computer, the user selects the M: drive in My Computer or Windows Explorer like they would any other drive such as a C: hard drive or a A: floppy drive.
In Windows 7, provided each computer is a member of the same Home Group, sharing a folder and mapping a network drive is unnecessary. Rather, Windows 7 provides default sharing automatically on commonly shared files and resources such as Music, Videos, and other Documents. The user can adjust these settings if they choose within the HomeGroup configuration settings screen in Windows 7 Control Panel. Users do not have to authenticate or type further passwords in order to get permission to connect. Instead, when setting up the HomeGroup, a user uses a Windows 7 generated password to authenticate each computer into the Home Group network securely. In other words, adding computers to the Home Group eliminates the need for further authentication from the user.
Standard TCP/IP settings still need to be configured on both Windows 7 and Windows XP. These settings include things like DNS servers, and Default Gateways. In addition, users should configure wireless routers for Windows 7 settings as well. However, tweaking wireless routers for speed on Windows 7 is unnecessary because Windows 7 auto-tunes its protocol configuration.