External drive, network access and privileges problem

I have two Dell Dimension 8200 in a home workgroup network using NIC’s and cable. Both computers have Windows XP Pro with SP3 installed. Networking components are: Cable Modem, Linksys model BEFCMU10; Router, Linksys model BEFSX41. No problems with network sharing of files and printers. Each of the computers have two internal hard drives installed and set up to backup data files on the second hard drive from the other computer.

A network problem occurred when I installed an external hard drive; Maxtor OneTouch 4 model STM305004OTA3E1-RK. I am just using this external drive to back up data files from the two computers; JPG photos, Word documents, Publisher documents, etc…No problems are experienced when backing up to the external drive from the computer to which the external drive is attached through the USB port. (Both computers still functioning with USB 1.1; I have a USB 2.0 card on order.) 

The second computer can see, read and copy files from the external drive over the network, but cannot write files to the external drive. A simple paste or drag and drop produces the error message: “Cannot copy (file name): Access is denied.” Or, using my Acronis True Image 11.0 backup software the error message is: “You do not have enough privileges to create the file (file name). Please choose another location.” 

On both computers I have set My Computer>Tools>Folder Options>View, and unchecked “Use Simple File Sharing.”I have followed instruction in Microsoft Article ID:308421 “How to take ownership of a file or folder in Windows XP”, but only get this error message; “Unable to set new owner on PDATA_C on Walter’s Computer(Walter-8200). This security ID may not be assigned as the owner of this object. 

User logon has administrator privileges on both computers. Sharing permissions for the folders on the external drive is set to “everyone”, full control. 

Thanks in advance for any help you can provide to solve this problem.

WalterC

My Systems:
Dimension 8200
1.8 GHz P4
Windows XP Pro SP3
BIOS=A02
1.5GB PC800 RDRAM
LITE-ON LTR-24102M [CD-ROM drive]
LITE-ON DVDRW SHOW-16935
3.5"[Floppy drive]
80 GB Seagate EIDE ULTRA ATA Hard Drive (Primary)
80 GB Seagate EIDE ULTRA ATA Hard Drive (Secondary)
64MB NVIDIA GeForce2 MX with TV Out [Display adapter]
DELL D1626HT [Monitor]