WinXP Pro Workgroup Network & Windows 7 Home Premium: School Dilema?

I am working as the all-purpose tech at a small school for kids with learning disabilities (no operating budget for IT) and we are in the process of upgrading parts of the network[Disclaimer: I did not setup this network, but I am heavily considering getting rid of everything and rebuilding it from scratch.]Setup:Right now we have an XP Pro Workgroup network with 4 Workgroups (Admin, Classroom, CompLab, Workgroup). We have about 50 computers (40 of them are Dell Optiplex GX 270s running XP Pro SP3, close to identical Hardware configs; the remainders are teacher's laptops and such).

We have 3 new machines (ADMIN workgroup) for the 2 school administrators and the administrative assistant. They are ASUS Essentio Desktops Model CM5570s Running Win 7 Home Premium. (You might start to guess where I'm going with the issues I'm having.)We are running a xerox WorkCentre 7346 w/ accounting, and have a few other printers scattered throughout the network.[Edit]The only machines not running XP Pro SP2/SP3 are the 3 ADMIN machines, my laptop (Dell Inspiron 1545), one laptop running Vista, 3 Macs, and 3 other laptops running Windows 7 [/Edit]Problem:The crux of the problem is with the 3 new machines working with the pre-existing XP Network.One of the new machines replaced our Administrative Assistant's old XP machine which hosted some files that the teachers needed to access (report cards, test results, etc.) When we put in the new machine, the teachers were no longer able to access these files across the network.

Most of the teachers are accessing the new machine (ADMIN1) on the ADMIN Workgroup from the other workgroups (CLASSROOM, COMPLAB, and WORKGROUP) are having issues. When attempting to access the new machine (ADMIN1), the pop-up error comes up:\ADMIN1SharedDocs is not available. You might not have permission to use this network resource. Contact the administrator of this server to find out if you have access permissions. <br><br>The network path was not found."I believe this to be a permissions and policy issue due to the limitations of Windows 7 Home Premium. We aren't able to fully integrate into the network from the Windows 7 side (tell me if I am off on this)Alternatively, we are getting the error when trying to access the CLASSROOM workgroup from a machine on the CLASSROOM workgroup of:"CLASSROOM is not accessible. [yada yada yada] . <br><br> Not enough storage is available to process this command."

This error pops up on a number of machines on the various workgroups trying to access their own and other workgroups and/or machines. This is most likely due to the 10 connection limit of XP Workgroups which I really want to solve by installing a server w/ SBS 2003 (we have the machine, not the OS, and not installed. . . yet.)Granted there are quite a few problems with the network and the way it is setup, I still have to make things work.We don't have a domain controller and I haven't been able to figure out how they set up the network in the first place, although I have managed to restructure some of the network. I have also begun to create a drawn out network map of infrastructure and after that I'm going to work on the arduous task of mapping out user permissions (which if you don't already know is one of the most time consuming things to do manually)