In my opinion, it's best to ignore the Homegroup method of networking in Windows 7 and stick to the more conventional way of just joining a Workgroup. Further down the left hand pane in the Network and Sharing Centre - below the Homegroup option, it says Networking and that's the way to go.
In there you can change the option to have all the machines use a password - select that one, make sure all the systems are in the same named Workgroup and off you go.