Strange but True
I had the same problems as many on this thread, namely that I couldn't get Estrongs to connect to my shared folder on my server running XP SP3. I have numerous computers networked and sharing folders, and I know I entered the correct username and password (many times!) to no avail. And I could tell that ES could see the server, I just kept getting the "login failed - want to try a new username and password" message.
After reading some of the earlier posts, I decided to try the Guest account method, and even without enabling the Guest account, I am able to connect to my server! WTF?! It's nice that I can finally connect and get the files I want without using the USB cable, but how insecure is that? And again, the really strange thing is that the guest account is turned off. I never turned it on to try to connect and then turned it back off again, I just tried it anyway without ever turning it on.
Strange, but I thought I'd share my story in case anyone else wanted to take the easy road to connecting when experiencing the same troubles. Just put in your IP address, enter "Guest" as the user with no pass, uncheck anonymous, and wa-la, you should be in business.