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I can confirm that the free version works, if you are reading this it has been posted on my computer which is running in a hotel room while I am in a pub elsewhere.
You may want to try downloading the logmein client again.
Also, are you connected to a router or are you trying to connect via a direct Ad-hoc connection, I don't think it will work that way.
Check your firewall and antivirus software, both of those can block a connection.
I'm connecting via WM5 to an XP, so can't emulate your conditions.
But I've never had any problems with the free version.
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