samba - Mar 2002 - trouble with password authentication fron Windows to Linux

I've seen many posts on this subject and several days researching but have
not understood much of
what I'm reading.    In over my head.

Any help appreciated.

Here are facts....

1.   I set up the samba on linux box.
2.   connected two windows 98SE machines 
3.   All machines connect to router 198.168.0.1, and use DHCP
4.   I set up a public directory on Linux box
5.   I can browse with Network Neighborhood & see all machines.   
6.   If I try to access the /home/user directory I'm prompted for a password
and the connection is refused with
password incorrect.   
7.   I'm sure the smbpassword, linux user, windows user passwords &
usernames are all the same.
8.  I use encrypted = yes for passwords on smb.conf

I checked my smb.log file and it says thus....
 

[2002/03/01 23:23:37, 5] lib/util.c:show_msg(470)
  smb_vwv[2]=2 (0x2)
[2002/03/01 23:23:37, 5] lib/util.c:show_msg(470)
  smb_vwv[3]=1 (0x1)
[2002/03/01 23:23:37, 5] lib/util.c:show_msg(475)
  smb_bcc=30
[2002/03/01 23:23:37, 10] lib/util.c:dump_data(2879)
  [000] 00 5C 5C 4E 41 5A 41 52  45 54 48 5F 33 5C 47 41  .\\NAZAR ETH_3\GA
[2002/03/01 23:23:37, 10] lib/util.c:dump_data(2887)
  [010] 49 4C 52 45 59 45 53 00  3F 3F 3F 3F 3F 00        ILREYES. ?????.
[2002/03/01 23:23:37, 3] smbd/process.c:switch_message(448)
  switch message SMBtconX (pid 3139)
[2002/03/01 23:23:37, 4] smbd/reply.c:reply_tcon_and_X(302)
  Got device type ?????
[2002/03/01 23:23:37, 2] smbd/service.c:make_connection(268)
  Invalid username/password for gailreyes
[2002/03/01 23:23:37, 3] smbd/error.c:error_packet(138)
  error packet at line 163 cmd=117 (SMBtconX) eclass=2 ecode=2
[2002/03/01 23:23:37, 5] lib/util.c:show_msg(459)
  size=35
  smb_com=0x75
  smb_rcls=2
  smb_reh=0
  smb_err=2
  smb_flg=128
  smb_flg2=1
[2002/03/01 23:23:37, 5] lib/util.c:show_msg(465)
  smb_tid=65535
  smb_pid=9691
  smb_uid=100
  smb_mid=31233
  smt_wct=0

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