At home I have a simple network setup containing 2 machines.
On one machine i have a site hosted with IIS7. Rather than the standard localhost/index.htm
You have to do following steps.
Go to IIS ->
Sites->
Click on Your Web site ->
In Action Click on Edit Permissions ->
Security ->
Click on ADD ->
Advanced ->
Find Now ->
Add all the users in it ->
and grant all permissions to other users ->
click on Ok.
If you do above things properly you can access your web site by using your domain.
Suggestion - Do not add host name to your site it creates problem sometime. So please host your web site using your machines ip address.