Authentication and The directory cannot be found

[EDIAZ]

We have a standalone Windows 2003 server (in the DMZ) that is being accessed
from a domain (it has to be this way) were we have create local accounts an
assign to certain people that maps manually to its share folders. (it is a
requirement not to use Domain authentication)

The workstations have Windows XP and users have mapped manually and choose
to remember the password on the mapping. Users are complaining that whenever
they are accesing the folder they are prompt with an error "The directory
cannot be found". After they hit ok, then they are able to access to the
folder itself.

I noticed on the security log at the server, event ID 680
(MICROSOFT_AUTHENTICATION_PACKAGE_V1_0) and ID 529 (Unknown user name or bad
password) which is the workstation trying first to authenticate with their
domain accounts.
After the ok then we have ID 538 and 540 (sucessful login which I believe is
the machine now trying to connect with the password save in the mapping).

The question is:
How can I assist the workstations so they authenticate correctly all the
time without being prompted?

 

[Old Rookie]

Just a guess but have them try to authenticate using the format
servername\username as the username to see of that works any better. For
instance is BOB wants to logon to the server named server1 have him enter
server1\bob in the username box.

Steve