Just spent 3 days working this out.
This worked for an Epson CX3200 USB Multifunction printer.
It might work for you.

Make sure sys is in details is checked for all users in user control,as
cups config is configured to system users.

Edit /etc/cups/cupsd.conf and add user to the groups line just to
avoid problems.

The main problem seems to be the print processor selected in Windows
XP printer properties.
Go to Start/printers and faxes.
Right click your printer and click properties.
Click the advanced tab.
Click the print processor button.
Select LmModiPrint and set data type to Raw.
Click OK all the way out.
Reboot.

Seems like the winprint processor does not like or understand what is being sent.