I finally solved this in the typical linux way, candle wax and redbull, and a loss of hair..
I couldn't figure out where i was going wrong, and today i solved this problem...
for some reason i needed to add the machine name, the command line kept coming up with errors, so i reached for Webmin
(fantastic software, best of breed)
And downloaded a mod for it, Samba Machine
which appeared to do the trick, I added the machine names and we were cooking with Gas...
Some other commands which may also have had an effect were
useradd -g root -d /dev/null -s /dev/null administrator
and followed by
smbpasswd -a root
I had already done the last one..
Samba 3 didn't need any of the XP registry hacks it worked first time out...
So there you go, add the machine name, make sure root is a recongised user and now i'm off to figure out about Samba and LDAP and the best way to manage 140 students on a network..