Authenticating Jaguar SMB from Windows
September 12, 2002
MacWindows.com: Mac OS X 10.2 (Jaguar) Cross-Platform Issues
"If you do an upgrade install and turn on all the Windows File Sharing features, you must *reset* your password in the Accounts System Preference to have the ability to log in to the Mac from Windows. Clean installs don't have this problem."
I'm guessing the problem is it needs to make the password hash for Windows Kerebos authentication and it can't do that because it doesn't have your plaintext password. Apple could have avoided that problem by prompting you for your password when you enabled the "log in from Windows" checkbox in your user account preferences.
Oh well, at least there's an easy fix!