Looks like the problem is relating to logging into the XP machine.
If you get a login box when trying to back up, make sure you use the SAM user account name.

Looks like this article addresses the issue, and will tell you how to find the SAM name.
Groups are displayed by using a Security Accounts Manager (SAM) account name instead of a common name in Windows XP

Also, make sure the backup drive is NTFS format, not FAT. Vista will only backup to NTFS.