I have a very similar setup problem, with three WinXP machines and one WinMeII (excuse me: Vista). The Vista machine is uncooperative.
Vague comments from persons-not-necessarily-capable have implied that Vista can't view "network files/folders" (i.e. shared resources on other computers) unless the Vista machine has full-blown account password setups, including a master Administrator account and at least one user account.
I've been reluctant to experiment, as it can be very difficult to remove a password/account setup if you mess it up, and I'd like to keep things as simple as possible. I've got the book, but I'm not under urgent pressure to get the Vista machine hooked up, and I expect several months of study before any real answers come out of it.
Meanwhile, for enterprise businesses WinMeII penetration has reached a whopping 6%, barely topping Macs (who tripled their penetration in enterprise use this year), with virtually all new installations of Vista coming from Win2K. Virtually NOBODY in professional IT management is moving from WinXP machines to Vista.
(WinXP remains at about 89% for enterprise - large corporate - users.)
My standard for a new system is that I should easily be able to move to the same level of competence/capability as with the previous system. If your competence was low enough, Vista and Office 2007 are great. I'm finding them "difficult."