finesse: The only other thing I can think of ATM is if TA is binding itself to the wrong interface, I've seen games do this sometimes when they only expect a computer to have one IP it binds to the first it finds.
Try disabling all but the connection with the other computer on it.
What about firewalls on the machines, are they disabled?
I'll see if I can think of anything else.
Edit: Just noticed you said the firewalls were disabled in the other thread...
Would it be binding to another interface even though I can see the hosted game? I have VMWare interfaces and a Hamachi interface but my LAN is first in the priority list.
I see traffic going between them but something isn't right because that connection never really get's established.
I'm really curious what the differences between your PC and my PC could be that breaks multiplayer and apparently many other player's multiplayer.
I think the XP VM is really the only option/workaround here. I'm willing to test your ideas if you have more.