After upgrading one of our Mac's to Lion, we found that you can no longer mount shared folders in either direction between each other. They fail with  “Connection failed” message.

1.Go to Preferences
2.Click on Sharing
3.Click on File Sharing on the left-hand side
4.Click the Options button
5.Uncheck “Share files and folders using AFP”
6.Check “Share files and folders using SMB (Windows)”
7.Click the Done button.

All should be OK now!