It sounds like you want to use the security=share mode. With XP Home edition, you can't use security=domain or security=ads. Also, look at the "ForceUser" and "ForceGroup" options. I think you want to force the user to guest and enable read and write access to the guest user.
First, I would recommend installing Fedora Core. Red Hat 9 is very old, and Samba 2.2 doesn't have some of the features of Samba 3.
Your smb.conf file probably should look something like this:
workgroup = WORKGROUP
security = SHARE
printcap name = CUPS
show add printerwizard = No
wins support = yes
comment = Students Files
path = /data/studentfiles
read only = No
force user = student
force group = school
guest ok = Yes
nt acl support = No
comment = Print Temporary Spool Configuration
path = /var/spool/samba
printable = Yes
guest ok = Yes
use client driver = Yes
browseable = No
I adapted this from example 2.2 of Samba-3 by Example. The wins support might not work with samba 2.2.
The user and group name, I just made up. You can create and use your own using a more appropriate name. Same goes for the the name and location of the share. Use the path that you already have on the server.
Setting the SUID/SGID bits on the directory may eliminate access problems on stored files:
Change the permissions of /data and /data/studentfiles:
sudo mkdir /data
sudo mkdir /data/studentfiles
sudo chown -R student:school /data
sudo chmod -R ug+rwxs,o-w,o+rx /data
This will cause all saved files to have "student" ownership and "school" group access.
On the windows computers set the wins ip address to 192.168.0.2.
Check if you have the "samba-docs" package. It may include documentation containing a similar example. With Samba3, it would contain the "Samba 3 by Example" book.
I think that not having a username may cause problems in windows networking. However, not having a password should be ok. Every windows computer needs a uniq name. You could give them simple names like xp1, xp2, ... xp20.