Windows XP Professional File Sharing:
"The file system in Windows XP is based on Windows NT and Windows 2000, so many of its features are new to users of Windows 95, 98, and Me. "

In Windows 95/98/Me, you can assign a password to a shared disk or folder, so that only people who know the password can gain access. That works well in a small home network where, for example, Mom and Dad know the password to the family's financial data, but Junior doesn't. But it isn't practical in a large corporate network, where Windows XP Professional is likely to be used. It's hard to keep a password secret in a large company, and changing to a new password requires giving it to everyone who needs to use it.

Windows XP Professional replaces password-based security with two alternatives:

• Simple File Sharing is enabled by default on Windows
  XP Professional systems that are members of a workgroup (typically
  used in small networks) rather than a domain (typically used in
  large corporate networks).  For full details, see our article
  on Simple
  File Sharing. There are no passwords or access restrictions
  and, with one exception described in the article, everything that's
  shared is accessible by everyone on the network.  Simple File
  Sharing is the only type of sharing available in Windows XP Home
  Edition.


• By disabling Simple File Sharing, you can specify an Access
  Control List (ACL) for each shared
  disk or folder.  The ACL specifies which users are allowed to
  have access.

http://www.practicallynetworked.com/sharing/xp_filesharing/index.htm