upgrade to XP SP2 or disable the policy on the client.
Is the Domain Controller NT4?
http://support.microsoft.com/default.aspx?scid=kb;en-us;319939
Description of the Point and Print Restrictions Policy Setting in Windows
Server 2003 and Windows XP
a.. By default, this policy setting is not configured. If you do not
configure this policy setting, users cannot download Point and Print
drivers
from computers that are not in their Active Directory forest. The result of
not configuring the setting is the same as enabling the policy and setting
it to Users can only Point and Print to machines in their Forest.
--
Alan Morris
Windows Printing Team
Search the Microsoft Knowledge Base here:
http://support.microsoft.com/default.aspx?scid=fh;[ln];kbhowto
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