I have 2 DESKTOPS, both running Win 7 home premium, hardwired to a belkin wireless router.   I have admin privileges on both computers and wish to share files between them.  (running AVAST free on both and temporarily disabled shield controls).  I have tried to set up a home group with and without a password, Windows tells me It cannot set up a homegroup on this computer. If I try to click on the Icon of one computer or the other, it asks me for the network password ( I assume that is the router password) and it tells me that it is the wrong password. I have been through advanced SHARING settings on both computers to make shure everything is the same (network discovery ect.) have run the network troubleshooters on both computers.  made sure the clocks were synchronized.  When I Google this problem I get exponentially more confused.  Thanks.This password is a password ( key ) used to join systems to the approved computer list, and not the router password unless the router password is the same. The options you have are to either create a password for other systems to join with or create a ( key ) which is a piece of media that can be used on the systems such as a thumb drive which contains the key to join other computers to the approved list.

As long as the AVG FIREWALL is disabled you should be all set. I ran into issues with the AVG Firewall trying to use 2 systems peer-to-peer and had to disable it to get them to share files and folders. I looked all over for an exception policy to alter, but simply the Firewall that AVG has was never intended for computers networked together to share files and folders. Meanwhile Zone Alarm many YEARS ago had an exception policy.

I have only used this flash drive key method for joining systems to a WHS and havent used it for Windows 7 to Windows 7. I just used a password. Here is more info: http://www.functionx.com/networking/Lesson04.htmThank you Dave Lembke for your informative response.  I had refurbished a discarded computer that was going to be a gift to my daughter, that I had to deliver today.  Wanted to transfer a 29 gig video file before I gave it to her.  At 4:00 am last night I finally got to where I could see the file but could not transfer it. Plan to get an external hard drive and transfer it that way.  (Man, take me back to xp networking).  Thanks again for your help.