File sharing permissions not inherited from parent to child

I am running Windows XP Pro on two networked computers, with a third network computer running XP Home Edition. I have Macafee Total Protection Suite.
When I set a folder to be shared on the network, the sharing permission is not applied to its subfolders. After trying this n the simplest manner, I then disabled simple file sharing (at the XP computers at least) and made sure in the security settings that the "Inherit from parent . . ." box was checked wherever I wanted to share. To experiment, after some frustration, I checked the "Replace permission entries on all child objects" box, but that didn't help either.
The machines have only one user account, the administrator, so have always had rights to all the files. The drives are all NTFS.
I have numerous documents in many folders, so it would be impractical to set the permissions for every folder; plus, I would like things to work as expected so I don't have to keep changing permissions.
I have examined all the permissions in the security tab, and changed everything so that all the security levels have total access. (Security issues aside, this is a personal network, and I am not very concerned about other users monkeying with the files.) At one point, I noticed that the "Owner/Creator" user of all the files had no access rights. I fixed that, but wonder where that came from.
I have spent hours and hours researching this, even looking for a reference in the Group Policy Editor. However, this a Workgroup not a domain, and I am inexperienced with that interface, so I could not find any reference there to Blocking Inheritance.
This issue is happening on both of the XP Pro computers, so it makes me think I am missing something. What the machines have in common is that the files were at one time encrypted, but have been decrypted. (I don't know if that is relevant.) Also, the files and folders I am trying to share are just things like Word, Excel, Powerpoint and Adobe documents, no programs or system files. Even copying a folder into a new folder with share permission (or into the Shared Documents folder) did not allow the Share attribute to cascade down even one level.
[I just came across an article which mentioned that Windows has a built in file limit of 5000, above which it starts to lose track of individual permissions- I am paraphrasing broadly here. I have 1,807 folders with over 15,000 files in My Documents. Could that be an issue?]
Help would be appreciated on getting the children to Inherit properly from their parent (before I leave my inheritance whatever it may be, to my actual children). Sorry for the long post, but please let me know if I should provide any additional information.
Thanks,

 

How about post link to that article! I think you misundestood.

Most all, even stripped installations of NT based installations will exceed 5000 files.

My Windows folder alone, contains 32348 files and 2847 folders.

There are limitations but not that small a number of files, see this:

http://articles.techrepublic.com.com/5100-1035-1042649.html

about half way down the page

Your problem is not the number of files.

How about clarifing your issue.

You share a folder then from another computer you can access the root of this share but not subfolders within it?

If so can you add files to this folders root and delete files from it?

Did you create the share from an Admin account?

Do the below

If you are mapping the drive then on the computer that has the mapped drive disconnect the mapped share. Reboot this one.

On the computer that has the shared folder, unshare it reboot then reshare.

Now try mapping again from the other computer. What are the results?

Mike