Did you go into the XP BT connection and configure what services you wanted to make available to the 770 and what level of security?

If you leave things at the default, it doesn't enable very much.

Also, comparing the Microsoft BT driver to the driver that came with my Targus BT dongle, the Microsoft version leaves a lot to be desired. I had a lot of problems when both drivers were installed and neither wanted to defer to the other. I don't think Microsoft put much effort into coming up with theirs.