Only one workgroup. Only 10 concurrent connections for any Windows XP.
I don't recall exactly, but if I remember well, if you are using an administrator account you may have more than 10 simultaneous connections to "server". This is a dangerous option, the local administrator account has complete rights over the computer (local administrator account for that server I mean).
To solve you problem, you may try to use a proxy program. Or a NAT server (it's the same thing for your problem) like ICS. Other NAT servers... You may use some Linux options. You may use some proxy servers for free. I will mention one proxy server that is simple to set up: Jana Server. But you may find others.
This adds some complication to your network... But you may try it. I do not know what application do you use for reading and listening, what type of files do you use. You will have to use 2 different subnets. Better 2 different networks, let's say 192.168.2 and 192.168.3. I reffer to logical networks, not physiscal networks. Your cabling solution doesn't change much, you will need 1 more network card and a cross over cable (I assume you have an Ethernet network). But you will change some IPs, you will install a proxy server/NAT server (in linux it's a "masquerading" server).
Do you have some computers network knowledge? IPs, networks, subnet masks? You will have to put 2 network cards in a computer; you will assign IPs for 2 different networks, you will install a proxy server or you will activate ICS on that computer. The Teacher computer has to have internet access? The other computers in network? This further complicates my "sollution".
The costs? A free proxy server (hence 0 price) or ICS (already included with Windows), a cross over cable (a few bucks) and a new computer network card (another few bucks). You will solve the problem with 30 dollars, if the application you use supports NAT traversal or using a proxy server.
But... I need more details before I will explain further.
So: what application do you use? What are the network requirements for the networked computers? Internet access on all of them? They ar part of a greater computer network?
Another simple sollution, which involves NAT, is to use a router. I will tell you further if I find more information from you. It's too large the subject, and I would not like to write here things that won't help you. I have to look forward to see if any type of connection is counted for that 10 limit. I know about network browsing, but I am not sure that any type of connection will add.
[Later edit] Any tcp/udp connection will add
. I'm reading further. [/Later edit]