samba - Jan 2004 - I am unable to access my shares: Incorrect password or Invalid user name

SAMBER server=3.0.1, Linux server=8.0, Windows Client= win 2000 pro

I am a newbie facing problems with my shares. I get "Incorrect password or
Invalid user name" after I enter my user name and password.
I have created the username on the my windows machine, my Linux machine and with
smbpasswd with same password.

when I issue : "smbclient //host/share" from the Linux machine , it
prompts me for password and afterwards it displays the following message:

session setup failed: NT_STATUS_LOGON_FAILURE

A copy of my smb client file is :

# Samba config file created using SWAT
# from 128.1.100.67 (128.1.100.67)
# Date: 2004/01/15 17:33:15

# Global parameters
[global]
        workgroup = IMSD
        netbios name = SAMBA
        log level = 3
        ldap ssl = no

[share1]
        comment = test share
        path = /var/log
        read only = No

[globus]
        comment = globus image directory
        path = /var/globus-image
        read only = No

I can see the shares (without password) when I set "security = share"
and "guest ok = yes".

I also noticed through the SWAT interface that smbd is always down even after
restarting severally.

I also tried starting from the command prompt (nmbd 1st, then follwed by smbd)
and I dont get any error message. But it displays not running (smbd only) from
SWAT interface.

I am really confused.

Any help?
Abdul