Don't know if this will help you or not, but I have a setup that I think is similar to what you are trying to do. Our PDC is SME 5.1.2 and we have a couple of Mandrake 8.1 servers doing some specialized file server tasks. Here is a snippet from the smb.conf of a server that our audio production department uses to store their audio projects. (Their workstations are Win98 domain members of the SME domain just like the rest of our staff).
[global]
workgroup = SERVERS
netbios name = prodserv
server string = CKUA Production Server
security = user
encrypt passwords = yes
smb passwd file = /etc/samba/smbpasswd
[workarea]
comment = CKUA Production Workarea
path = /home/workarea
admin users = admin dloewen
valid users = @prod
public = no
guest ok = no
writable = yes
read only = no
create mode = 2770
inherit permissions = yes
The server is setup with an static IP in the range of the SME DHCP server, with the SME server as it's DNS, and with a hostname belonging to the SME domain. (The SME domain is "ckua.org", so the server is "prodserv.ckua.org")
Use the adduser and smbpasswd -a commands to create users/passwords that match the SME user/passwords. In the "valid users" section of the share, enter either the usernames, or create a group with all the users in it and put "@groupname" in that field.
Hope some of that helps.
Regards,
Derek