this article is technically correct, however it fails to point out that
samba can be upgraded to support encrypted passwords.  see:
15th July 97: Samba and Encrypted Passwords.
http://samba.canberra.edu.au/pub/samba/SambaEncryption.html
luke
extract:
    After upgrading your Windowss NT 4.0 computer to Service Pack 3
    (SP3), you are unable to connect to SMB servers (such as Samba or
    Hewlett-Packard (HP) LM/X or LAN Manager for UNIX) with an
    unencrypted (plain text) password. 
    When attempting to connect after you upgrade to Windows NT 4.0
    Service Pack 3, you receive the following error message: 
     System error 1240 has occurred.
     The account is not authorized to login from this station.
    Connecting to SMB servers (such as Samba or Hewlett-Packard (HP)
    LM/X or LAN Manager for UNIX) with an unencrypted (plain text)
    password fails after you upgrade to Windows NT 4.0 Service Pack 3.