Solved the problem by creating a new home network in XP and using that. I also found a setting in Avast firewall advanced that "sounded" like it needed to be turned on--but couldn't find it in the quick start guide for Avast, so I am still not sure if I should have changed that setting.
I did find some ambiguous language on the email sent with my license saying you must follow the same installation procedure on the other computers (I bought three license deal). But I take that to mean if and when you want to apply the license you just bought. Instead, judging by the response of customer support, they really mean MUST if you want to share files. That is, when I called and told the rep what had happened he immediately said he could fix it and we went about installing it on the laptop. When I told him that I may have messed up my sharing permissions BEFORE I knew Avast needed to be on the other computer as he had just explained, he said I could buy a support service for a year at over $100 to solve my XP problems! Naturally, THAT did not make me happy.
I declined, had XP restore the computer, re-installed the licenses on both computers, and finally figured out that I could just create the new workgroup. Now at last it seems to work. (From Avast and this forum--Silence.)
