The server is XP pro which will only allow 10 connections at a time and that is where I run into the brick wall.
Sorry for the confusion earlier but Bert you are right in your assumptions regarding using a workgroup and not a domain. basically I have 12 computers with 11 sharing the database on the 12th which is XP Pro. All 12 are Logged into AC at once with the 6 exam room being logged on to AC twice with Fast User Switching. Which if I understand correctly Windows XP Pro sees as 18 connections plus my networked printers.
Money is a concern but not the major one. I like peer-to-peer for the simplicity. If I priced correctly I can get a Dell server with server 2008 and 20 CALs for around $2,500. I just dont want to get too complicated so we can do some of the IT stuff in house.