Networking XP and Windows 7

[#1]

Just spotted an odd thing.
The XP computer can see the Widows 7 machine correctly and is in the same workgroup and used to work correctly but now shows this where the Windows 7 computer is shown as internet not local network.
Any thoughts

[#2]

I get similar results to you.
My Network Places on an XP laptop shows folders on a computer running Vista and on a different laptop running XP as The Internet. However those on the laptop itself show as Local Network, with one exception - SharedDocs on the laptop shows as The Internet. The "computer name" column contains "This computer" for "Local Network" but the laptop's descriptive name for "The Internet".