Problem with NT encryption to Linux Samba Server

[amulyon at ipass.net]

Hi all,

I apologize if this question has been answered before.
I'm very new to setting up samba server in RedHat linux 6.0  and accessing it
from windows NT 4.0 SP3.

I set up samba server (2.0.3) with encryption so that when I access
it from NT, the NT box won't complain about sending password in a
clear text over the wire.
I created /etc/smbpasswd using mksmbpasswd.sh utility

--snip of smb.conf ----

encrypt passwords = yes
;security = server
hosts allow = all
guest account = pcguest
guest ok = yes

[public]
   path = /home/pcguest
   public = yes
   guest ok = yes
   writable = yes
   printable = no
--- end of smb.conf ----

When I tried to access the public share from NT using pcguest%pcguest as
a user and password I got an error message in /var/log/samba/log.sbm:

[1999/05/17 17:43:38, 1] smbd/password.c:pass_check_smb(506)
  Account for user 'pcguest' was disabled.
[1999/05/17 17:43:38, 1] smbd/password.c:pass_check_smb(506)
  Account for user 'pcguest' was disabled.

I already created a unix user of pcguest in /etc/passwd and give a 
guest ok = yes permission.

Even worse I can't access it from local machine using a command :

host $ smbclient //cy25013-7/public -Upcguest%pcguest
Added interface ip=166.34.21.214 bcast=166.34.23.255 nmask=255.255.248.0
Got a positive name query response from 166.34.21.214 ( 166.34.21.214 )
session setup failed: ERRSRV - ERRbadpw (Bad password - name/password pair in a Tree Connect or Session Setup are invalid.)

Can somebody point me to the right direction please!

Thanks in advance.

Aris

-- 
"...Unix, MS-DOS, and Windows NT (also known as the Good, the Bad, and
the Ugly)."
(By Matt Welsh)