I was thinking of installing the Hamachi program, but am concerned about the security warning. I tried to follow the instructions in the link fatalsync posted for removing the "Everyone" group from the "Access this computer from the network" Local Security Policy setting, however I do not see the options described when I follow the steps. It seems those steps are for Windows XP Proffesional only? I have regular Windows XP...

What is the real danger or am I being paranoid? Couldn't the network be a target for people with malicious intent? How can I protect my computer?

In regular win XP you need to:
go to control panel -> Administrative Tools
Local Security panel -> Local Security Settings

From there everything else should look the same.

Thanks.

I tried this and tried it over and over. I am pretty decent with getting around a computer but I can't find this. I go to:

Control panel -> Administrative Tools

All I see there is:

Component Services
Computer Management
Data Sources (ODBC)
Event Viewer
Microsoft .NET Framework 1.1 Configuration
Microsoft .NET Framework 1.1 Wizards
Performance
Services

I went into all of these to search for anything close to secuirty settings and I find nothing even close.

I use Norton Firewall and also have Windows Firewall but Windows Firewall is turned off since I have Norton.

I have multiple user accounts and have file sharing among each other, one has no file sharing at all. I cannot find the path you mention above on any of these.

Perhaps some other setting I have is causing something?