"Samba, however, will not accept any users until the smbpasswd file has been initialized."
There is an exception. Guest are not required to enter a password if they are accessing the LINUX computer from Windows.
Since Win95 SE and higher has encrypted passwords. You need to specify encrypted passwords in the global section in smb.conf file. Samba defaults to non-ecrypted passwords. Samba comes with reg files so you can use non-encrypted passwords on the Windows computers instead.
If you want to test your shared directory structure, you can change security = user to security = share. You may want to add guest ok = yes and guest only = yes in sections that you want guest to access.
Don't forget to add ' large readwrite = yes ' in the global section just in case any of your users are reading or writing huge files.