There's a confusing amount of accurate and inaccurate detail in this thread so I'm relating critical steps I took this morning helping a neighbour implement printer sharing in his home network where a Canon MP160 printer is connected to a Compaq Presario desktop PC running Windows VISTA Home Premium with SP1. He wanted to be able to print wirelessly from an Acer TravelMate 4000 notebook running Windows XP with SP3 in another room. If you follow these steps everything should work first time but be patient while Windows finds the new printer share.
1. Right click My Computer and open Properties on the PC connected to the printer. Write down the Workgroup name on a piece of paper, or change it to a new name keeping this new name to something simple like DADSHOME. If you change the Workgroup name, you will need to re-boot the PC for the new Workgroup name to take effect.
2. Go to the other PC or PC's - those without the wired printer connection, and from which you want to print remotely - and change the Workgroup name to whatever the Workgroup name is in Properties for the PC with the printer connected. In the example in 1. above, you would change each PC's Workgroup name to read DADSHOME. As in 1. above too, anytime you change the Workgroup name you must re-boot that computer for the changed Workgroup name to apply. When done, all your PC's in the home network will have the same Workgroup name, and this is a basic requirement for printer sharing to work.
3. Now back to the host computer, the one to which the printer is hard-wired running VISTA, there are some more things to do on that box:
First, in your Network Connections click on Properties to bring up the adapters and protocols that Microsoft has installed. The File and Printer sharing box for Microsoft Networks must be checked. Close Properties. If you have changed anything, Windows will probably order you to re-boot your system for changes to take effect.
Second, in Control Panel look for Printers. Without recalling the exact name for the Control Panel window in VISTA (I'm Windows XP-knowledgeable, plus the neighbour's OS'es were all in Spanish) you will find an option to add a printer. Here there are three details to be sure to take care of:
(a) In the Sharing tab be sure to check the right to share printer box, and Apply the change, OK;
(b) Check that you are automatically allowing any other remote PC that you are allowing to share this printer to load the same printer driver that is used by the host PC.
Then this last one is vital - it stymies many people or they just plain forget about it or don't even know about it,
(c) Uncheck the requirement for Printer-password access in VISTA to share the printer on the network.
If it makes you feel more comfortable, reboot all PCs in the network and when you go to add a printer to each remote PC (those without the printer attached) it should just be a task taking a few moments of your time. This morning it took me about ten minutes to make the changes, do the rebooting, and print out a test page on each machine. I hope this helps although I apologize for not supplying the exact Windows dialogue boxes.