When trying to setup up a homegroup with Windows 7, I kept getting messages saying a homegroup can not be setup on this computer. After several hours, a Geek Squad agent and I figured out that the Norton Internet Security (NIS) 2011 program prevents a successful setup. To setup a homegroup, the Windows firewall for all computers must be ON. NIS takes control of the Windows firewall even when the NIS firewall is turned OFF.
This is what needs to be done.
1. Uninstall Norton Internet Security (NIS) completely from all computers on the home network.
2. Turn on the Windows firewall for each computer.
3. Run the homegroup setup wizard on the "base" computer.
4. From other computers, join the homegroup using the password provided during setup on the "base" computer.
5. Reinstall NIS on all computers.
If the problem persists, you can "ping" one computer from another to test the network connection. Any remaining problems are probably related to permission settings for security and sharing.
I hope this helps someone.