Problems with Vista and LAN

Me and my friend are trying to do a LAN game, he is on Vista, I am on XP SP2. We are on the same CD Key.

When he tries to join my game it says "Network Error - Disconnected from Server", same thing when he tries to HOST a game which we both thought was exceptionally strange even for Vista. We both turned off our Firewalls, he is using a cord instead of wireless, we both have v1.02. I'm stumped, no idea where to go from here, any help would be very appreciated.

-kommie92