In Windows 98, Right Click Network Neighborhood, Properties, in the Identification Tab the Workgroup is what it is important (The XP machine has to be in the same workgroup but with a different Computer name) any other value of Domain in Windows 98 is irrelevant for the local network.
In the Configuration Tab in the TCP/IP settings for the Network card the IP settings has to be set to "obtain an IP address automatically"

In Windows XP Control Panel, Network and Internet Connections, Network Connections, double click on the local network connection, go to Properties, double click on Internet Protocol (TCP/IP) check if you have there Obtain an IP address automatically or Use the following IP address.
For the Workgroup settings Control Panel, Performance and Maintenance, System, Computer name check the workgroup is exactly the same as the other, the name of the computer has to be a different one, any other domain name somewhere else is irrelevant for the local network.

Roni - On the SE machine I have the same workgroup as the XP (SYSTEM1)system but with another computer name (SYSTEM3). However, I do NOT have select automatically. The PC911 instructional for SE when I set it up before XP installation said to use a specific one 192.168.0.2 for the remote system. That's what's still there.

In XP, the same is true, no automatic selection. Uses 192.168.0.1

If the domain name is irrelevant, so be it. I just noticed that SE had the same domain name as Workgroup name, but nevertheless, both XP & SE have the same Workgroup name.

Useful?

The SE machine cannot see the XP system in Network Neighborhood but can ping it. How can that be?
Fred