See this post (for what it's worth) by komickaze @ http://www.tomshardware.com/forum/75-63-windows-samba-issue:
I had a similar problem when trying to connect Windows 7 Home Premium and Windows 7 Ultimate to a Mac OS 10.3.9 Server. I made the following change with the Local Security Policy on Ultimate and tested it successfully while watching the registry for changes. I found the following REG_DWORD values were changed:
After further testing, I found these to be the values and coresponding settings:
0) Send LM & NTLM responses
1) Send LM & NTLM - use NTLMv2 session security if negotiated
2) Send NTLM response only
3) Send NTLMv2 response only
4) Send NTLMv2 response only. Refuse LM
5) Send NTLMv2 response only. Refuse LM & NTLM
I created the LmCompatibilityLevel setting on my Home Premium machine with a value of 1 (http://www.builderau.com.au/blogs/codemonkeybusiness/viewblogpost.htm?p=339270746) and was finally able to connect to the 10.3.9 Server.
Located about halfway down the page, use CRTL+F and search for a keyword in komickaze's post.