This article is from the Macintosh system software FAQ, by Elliotte Harold email@example.com with numerous contributions by others.
Apple originally planned to treat removables like floppies
rather than hard disks for file-sharing. At the requests of beta
testers file-sharing on removables was hacked into System 7.0 at
the last minute. However, since file-sharing was originally to be
implemented only on fixed drives, no means were created for the
host Mac to tell other Macs when a new volume went on or off-line.
Therefore sharing a removable volume requires that the disc or
cartridge be inserted and mounted when filesharing is turned
on. Turn filesharing off and on with the drive powered up and
the cartridge inserted and you should then be able to share