Well..im becoming as confused as you. But, I had this very same problem several DAYS ago. It was after I reformetted (for a different reason) and went to set the file sharing up, and i accidentally hit "use wizard" and after I used the wizard I was unable to get the file sharing working. All that I would get after everything is properly configured was the same message you got there.
What i had to do was re-reformat and NOT use the wizard...worked perfectly.
This would be a dumb thing to reformat over probably but I don't think I can help you anymore than this other than telling you to never use the wizard again....
Ill try telling you two more suggestions...Try booting in safe mode. In safe mode Windows XP home can set file permissions. So boot in Safe Mode and try fooling arround with some permissions. Try setting them to ALLOW. Also, add a group with your user name "ex: adding SIMON" as a group, and set the permissions to ALLOW. Also, add a group called Administrators and set that to ALLOW. Try going to your printer, right click and go to properties or sharing and see if you can set permissions for that. Try doing this for the C Drive you have shared too. Then boot up again regularly and see if it works.
Second, if you have just RECENTLY used the wizard to set file sharing, try using system restore located in Start-->All Programs-->accessories-->System tools-->system restore. Restore to a day BEFORE you used the wizard and try setting it up normally.
If none of that works...ill give one last piece of advice...
go to
http://www.computerforum.com and ask this same question there, maybe they can help.
Sorry I couldn't help you faster...
Good Luck...