If you edit a user's details from the Accounts preferences, there's a checkbox labeled "Allow user to log in from Windows." What on earth does this do exactly?
Except it doesn't work(I think it's XP and not OS X) because it says that the username/password is wrong.
The reason I think it's XP and not OS X that is to blame is because XP wants the username to be host\user instead of just user and OS X wants just user for the username.