Just in case anyone else has this problem in the future, I will post the solution.
My symptoms were:
I could transfer files to another computer on my network, while I was doing it from my WinXP computer.
I could not transfer files while on the Win7 computer. The transfer was super slow and eventually just halted. I was, however, able to navigate and explore the files on the other computers from the Win7 computer.
I got this solution from someone named Footballcoach on the Microsoft forums and decided to spread it around a bit since I see a lot of people have this issue, and a lot more people are giving worthless advice.
Here is what fixed the issue:
To fix the dreadfully slow file copy issue FROM a Win7 x64 system TO a WinXP x32 file share/server, etc.
1. Turn off the Windows 7 Homegroup feature by "leaving" it. This can be located in: Control Panel\Network and Internet\HomeGroup
2. Make sure you have Network discovery, Public Folder Sharing, File and Printer Sharing, etc. ON in both your network profile here as well: Control Panel\Network and Internet\Network and Sharing Center\Advanced sharing settings
3. Logoff when prompted and Reboot
Note: You can still be part of a windows workgroup, but leave the homegroup. Once you do that your file copy issues should be solved.
I didn't 'find' this solution, but I started thinking about network discovery and offline files in Win7. The offline files feature I believe is what causes this bug, but not sure. Anyway, it's an easy thing to try and if it doesn't work you can easily revert back.
This change fixed my file transfer issues completely. What was taking hours to copy from Win7 Pro to an XP sp3 system now takes a minute or two.