>We have a DOS Clipper app that is running on a XP Pro PCs on a network.

Is this a pure XP network, a combine XP and Windows Server network or a Novell network? DOS applications tend to work better with Novell, Windows apps tend to work worse with Novell. None of those works that well in a peer to peer environment with just XP.

>Wasn't there a FILES= setting in the DOS days that was set in the autoexec.bat or config.sys file?

The setting still exists, but should be in the CONFIG.NT file which you can find in the root or the Windows directory depending on which version of Windows you are using. You can also specify a different CONFIG.NT file for every DOS app in the PIF file.

> I remember having to do this for Fox DOS apps, but does the same apply for Clipper DOS apps?

Yes, that file applies to every DOS application.