sounds like a permissions issue or possibly a double hop issue

I have been able to repro under the following circumstances

two machines not in a domain

user can access the directories of remote computer (call it computer2) and a specific directory.

however, i cannot add the user of computer1 to computer2 (since they are somewhat unknown by not being in a workgroup or domain) shares or folder permissions.

But the user of computer1 can access all directories via xp_dirtree so long as the path is on computer1

So the next question would be, are the two computers in the same workgroup or domain?