[Samba] newbie question/authenticate

[Condic]

I have a small network running in a school.  My network is 
working.  samba is running on openSuSE 11.0 and Windows XP and 
Windows98se can access the non protect samba shares/sections.

I have one problem that I been struggling with.  I have read the 
howto's, and searched the lists, but can not find the solution.

I would like to implement [homes] or [usershares] for student 
directories and file storage:

When accessing the /students or /homes directory, students would be 
prompted for a username and password.  The student would not need to 
be login to the Windows OS.  That is, I just want a prompt for both 
username and password when the share is accessed.  This should work 
from either Windows 98se or Windows XP.

Linux:  Do students need Linux/UNIX accounts? [yes]
Linux:  what do I need to set the security = share/user/server/domain/ADS ?
Linux:  Do I need to add each student to the smbpasswd directory? [yes]
Linux:  What are the minimum parameters that I need to implement [homes] ?
Linux:  What are the parameters that I need to implement [usershares] ?

Windows question:  I have setup the Linux samba shares.  When I 
access the shares, the windows box that pops up does not allow me to 
change the username, only the password.  The user name is 
/guest/login-name.  I would like windows to prompt me for the "user 
name" as well as the "password".  On XP, if the user is login'ed to 
the machine, then adding the password gets the right share.  If I 
knew the name of the windows service, I would have a chance at 
searching for the solution.

# samba parameters from testparm

[global]
         workgroup = TAKE5
         interfaces = 192.168.1.203/255.255.255.0
         bind interfaces only = Yes
         security = SHARE
         map to guest = Bad User
         log level = 2
         smb ports = 139
         socket options = SO_KEEPALIVE IPTOS_LOWDELAY TCP_NODELAY
         printcap name = /etc/printcap
         mangling method = hash
         os level = 255
         preferred master = Yes
         case sensitive = No
         mangled names = No

[files]
comment = Work area files
path = /students/%U
read only = No

[teacher]
comment = Master work area files
path = /students
valid users = srannie
read only = No

I have setup Linux accounts, and samba passwords for each 
student.  If the student is login'ed to Windows XP, and accesses the 
/files directory, there is no problem, but if the student is not 
login, I can't seem to get this to work.  What can I do to make this 
work?  Thanks.