First off, here's what you need to do. Open Windows Explorer, and click Tools>Options>View and at the bottom, uncheck the "Enable simple file sharing (Recommended" box and click Apply>OK. Then, right click the folder that you want to share (please try not to share the root of the drive) and select Properties>Sharing. Select "Share this folder" and give the share a name. If you're really paranoid, you can create an account for the user on the computer, and assign Permissions to him to either Read/Write/Full Control over the folder and then deny the rest. So the next time he tries to access the folder, he will be prompted for a username and a password and enabling it will allow him to view the folder and copy data to/from it.
Of course, since he is using the Home Edition, you're out of luck as Windows XP Home does not support Advanced file sharing.
So, as sailendra said, either both of you switch to either Windows XP Pro or Windows 2000 Professional, that is, if you're uncomfortable or facing problems with simple file sharing using the Shared Folders.
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