I think I've followed everything through as best as possible. I added all the optional features to XP Pro bar Windows Messenger.
The current ipconfig /a for XP Pro is 
Microsoft Windows XP [Version 5.1.2600]
(C) Copyright 1985-2001 Microsoft Corp.
C:\Documents and Settings\Admin>ipconfig /all
Windows IP Configuration
        Host Name . . . . . . . . . . . . : apollo
        Primary Dns Suffix  . . . . . . . :
        Node Type . . . . . . . . . . . . : Hybrid
        IP Routing Enabled. . . . . . . . : No
        WINS Proxy Enabled. . . . . . . . : No
Ethernet adapter Local Area Connection:
        Connection-specific DNS Suffix  . :
        Description . . . . . . . . . . . : Realtek RTL8139/810x Family Fast Eth
ernet NIC
        Physical Address. . . . . . . . . : 00-0D-61-26-F8-23
        Dhcp Enabled. . . . . . . . . . . : No
        IP Address. . . . . . . . . . . . : 192.168.40.11
        Subnet Mask . . . . . . . . . . . : 255.255.255.0
        IP Address. . . . . . . . . . . . : fe80::20d:61ff:fe26:f823%5
        Default Gateway . . . . . . . . . : 192.168.40.10
        DNS Servers . . . . . . . . . . . : 192.168.40.10
                                            fec0:0:0:ffff::1%1
                                            fec0:0:0:ffff::2%1
                                            fec0:0:0:ffff::3%1
        Primary WINS Server . . . . . . . : 192.168.40.10
PPP adapter Freeserve:
        Connection-specific DNS Suffix  . :
        Description . . . . . . . . . . . : WAN (PPP/SLIP) Interface
        Physical Address. . . . . . . . . : 00-53-45-00-00-00
        Dhcp Enabled. . . . . . . . . . . : No
        IP Address. . . . . . . . . . . . : 217.134.42.237
        Subnet Mask . . . . . . . . . . . : 255.255.255.255
        Default Gateway . . . . . . . . . : 217.134.42.237
        DNS Servers . . . . . . . . . . . : 195.92.195.95
                                            195.92.195.94
        NetBIOS over Tcpip. . . . . . . . : Disabled
Tunnel adapter Teredo Tunneling Pseudo-Interface:
        Connection-specific DNS Suffix  . :
        Description . . . . . . . . . . . : Teredo Tunneling Pseudo-Interface
        Physical Address. . . . . . . . . : 80-00-F1-FF-26-79-D5-12
        Dhcp Enabled. . . . . . . . . . . : No
        IP Address. . . . . . . . . . . . : fe80::5445:5245:444f%4
        Default Gateway . . . . . . . . . :
        NetBIOS over Tcpip. . . . . . . . : Disabled
Tunnel adapter 6to4 Tunneling Pseudo-Interface:
        Connection-specific DNS Suffix  . :
        Description . . . . . . . . . . . : 6to4 Tunneling Pseudo-Interface
        Physical Address. . . . . . . . . : D9-86-2A-ED
        Dhcp Enabled. . . . . . . . . . . : No
        IP Address. . . . . . . . . . . . : 2002:d986:2aed::d986:2aed
        Default Gateway . . . . . . . . . : 2002:836b:213c::836b:213c
                                            2002:c058:6301::c058:6301
        DNS Servers . . . . . . . . . . . : fec0:0:0:ffff::1%1
                                            fec0:0:0:ffff::2%1
                                            fec0:0:0:ffff::3%1
        NetBIOS over Tcpip. . . . . . . . : Disabled
Tunnel adapter Automatic Tunneling Pseudo-Interface:
        Connection-specific DNS Suffix  . :
        Description . . . . . . . . . . . : Automatic Tunneling Pseudo-Interface
        Physical Address. . . . . . . . . : D9-86-2A-ED
        Dhcp Enabled. . . . . . . . . . . : No
        IP Address. . . . . . . . . . . . : fe80::5efe:217.134.42.237%2
        Default Gateway . . . . . . . . . :
        DNS Servers . . . . . . . . . . . : fec0:0:0:ffff::1%1
                                            fec0:0:0:ffff::2%1
                                            fec0:0:0:ffff::3%1
        NetBIOS over Tcpip. . . . . . . . : Disabled
Tunnel adapter Automatic Tunneling Pseudo-Interface:
        Connection-specific DNS Suffix  . :
        Description . . . . . . . . . . . : Automatic Tunneling Pseudo-Interface
        Physical Address. . . . . . . . . : C0-A8-28-0B
        Dhcp Enabled. . . . . . . . . . . : No
        IP Address. . . . . . . . . . . . : fe80::5efe:192.168.40.11%2
        Default Gateway . . . . . . . . . :
        DNS Servers . . . . . . . . . . . : fec0:0:0:ffff::1%1
                                            fec0:0:0:ffff::2%1
                                            fec0:0:0:ffff::3%1
        NetBIOS over Tcpip. . . . . . . . : Disabled
C:\Documents and Settings\Admin>
The current configuration for the server is:
Review configuration
Networking Parameters 
Server Mode servergateway-private 
Local IP address / subnet mask 192.168.40.10/255.255.255.0 
External IP address / subnet mask /255.255.255.0 
Gateway 192.168.40.10 
Additional local networks No additional networks defined 
DHCP server enabled 
Beginning of DHCP address range 192.168.40.65 
End of DHCP address range 192.168.40.250 
Server names 
DNS server 192.168.40.10 
Web server 
www.sageworld Proxy server proxy.sageworld:3128 
FTP server ftp.sageworld 
SMTP, POP, and IMAP mail servers mail.sageworld 
Domain information 
Primary domain sageworld 
Virtual domains No virtual domains defined 
Primary web site 
http://www.sageworld Mitel Networks SME Server manager 
http://zeus/server-manager/ Mitel Networks SME Server user password panel 
http://zeus/user-password/ Email Addresses useraccount@sageworld
firstname.lastname@sageworld
firstname_lastname@sageworld 
The workgroup is Workgroup with a big W just like in XP.
As before, I can FTP, ping and putty but cannot enter using Windows explorer. The directories will not share.
I'm still stumped. And yes... I left the server running for over 2 hours. 
I wonder whethe rthe DHCP range might be off?
LDAP directory access is set to private. Is this the problem?
It's set for Workgroup and domain controller.
I've looked through the user guide 5.1 (this is server 5.6) and can see nothing that points in any particular direction.
Is this a soluble problem?
MP