OK.
We have a Windows 7 64-bit PC.
We are using XP Compatibility Mode.
I will use these terms:
"Outer Machine" means the Windows-7 PC (or the Host).
"Inner Machine" or VM (Virtual Machine) means the XP Compatibility Mode Virtual PC.

THINGS WORK SOMETIMES and FAIL SOMETIMES.
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The C:\USERS\RON folder in the "outer" PC is shared - full rights to EVERYBODY.
The "inner" PC maps drive letter Z: to this outer-machine folder. (C:\USERS\RON)

Sometimes everything works perfectly:
  We launch the VM (Virtual Machine / Inner Machine)  and everything works great.  The apps can access the files in and under Z: (C:\USERS\RON) of the outer PC - and all is fine.

Other times (often) nothing works - we get ERRORS trying to access the data in and below the Z: drive.

If we now close everything and restart the (whole) computer, most of the time, everything works perfectly.

I hate to write this because it I am pretty sure it is unrelated - but ...
Ron has Verizon issues.  Occasionally, he can't get on the Internet.  When I remote-in to his PC, I occasionally have internet connectivity problems.

I am also aware that one has to set the NIC card from NAT to the actually NIC card type.  I've done that too.  It doesn't ever network if you don't do that.

What can we test?
What is going wrong?
Thank you