Can't connect via SMB, OSX Server 10.5.8

The logs just show an authentication failure.
We're just in the process of setting this up in a mixed environment where the server would be bound to an Active Directory server, with both Mac and Windows accessing the OSX server. At this point, the accounts would be local to the server.
The question in my mind is, do we have to enable OD and make it a child to the AD server?

Update:
With guest access enabled for smb connections, Macs can connect using authentication for afp and guest access for smb connections. Windows users cannot connect if they authenticate and guest access is not available to them at login.
So it seems that it isn't a connectivity issue, it's an authentication issue.
Still looking for ideas. Logs still just say that it's an authentication failure, nothing more.

The log reads
smb pwd_checkntlmv2 gave 14090 [eDSAuthFailed}