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ANSWER:

To troubleshoot the RDP connection problem, I've decided to see if Windows 7 Firewall blocks TCP port 3389 which is used by RDP protocol. I've used telnet for quick and dirty port check:

telnet win7host 3389

and telnet was not able to connect either. I've tried telnet to some other Win XP remote host, and it worked (had to close telnet window manually b/c it entered into non-responding state)

So now it has become clear that Windows 7 Firewall is most likely the reason of my connection not getting through. Disabled firewall - tried to connect both through MSTSC and telnet - nothing has changed... connection was failing ...