OS:
Red Hat ES 5.2

Kernel:
2.6.18-92.1.18.el5

Samba version:
[root@intranet samba]# rpm -qa |grep samba
system-config-samba-1.2.39-1.el5
samba-common-3.0.28-1.el5_2.1
samba-client-3.0.28-1.el5_2.1
samba-3.0.28-1.el5_2.1

When I try to connect to the share from my XP machine, I get a "network path cannot be found" error message.

Below is the entry in /var/log/samba/samba.log

[2008/11/19 11:57:51, 0] smbd/service.c:make_connection_snum(1003)
'/server2/test' does not exist or permission denied when connecting to [server2] Error was Permission denied

Here is my smb.conf file:

[global]
# Server name
server string = Intranet Server (Primary)

# These are the default password settings.
; encrypt passwords = yes
; smb passwd file = /etc/samba/smbpasswd

# Define NT domain/workgroup name.
workgroup = intranet

# Security mode. (See SAMBA documentation for details.)
; security = user

# Restrict conections to specific IP addresses.
hosts allow = all

# The %m variable sets a separate log file for each
# connecting machine.
# log file = /var/log/samba-log.%m
# Keep it basic - one file!
log file = /var/log/samba/samba.log

# The number of minutes inactivity before a connection is
# disconnected. (This disconnection should be transparent to most
# clients, which an have auto-reconnect feature. Removing inactive
# connections is to preserve the server's resources.)
deadtime = 10

# These socket options are suggested in the default smb.conf file.
# Who am I to disagree?
socket options = TCP_NODELAY SO_RCVBUF=8192 SO_SNDBUF=8192

# Define both Ethernet interfaces. (Otherwise, I suspect only one
# will be configured??)
interfaces = eth0 eth1
username map = /etc/samba/smbusers
; guest ok = no
; guest account = nobody


[server2]
comment = server2
path = /server2/test
write list = @intranet
force create mode = 775
force directory mode = 2775
writeable = yes
; browseable = yes
valid users = intranet

/server2 and /server2/test are owned by user intranet and both directories have permissions set to 777.

Has anyone come across this problem in the past?

uncomment security = user

... and while we're checking basics:
did you run smbpasswd?

I did run smbpasswd -a <username>

It turned out that SELinux and IPTables were the culprits.

I had to run "# chcon -t samba_share_t /path" on the directories I've created.

I also had to open the ports that clients use to connect to Samba.

Edit /etc/sysconfig/iptables and add the following 4 lines just before the line with "-j REJECT" in it:

-A RH-Firewall-1-INPUT -p udp -m udp --dport 137 -j ACCEPT
-A RH-Firewall-1-INPUT -p udp -m udp --dport 138 -j ACCEPT
-A RH-Firewall-1-INPUT -m state --state NEW -m tcp -p tcp --dport 139 -j ACCEPT
-A RH-Firewall-1-INPUT -m state --state NEW -m tcp -p tcp --dport 445 -j ACCEPT

Get rid of that newbie tag; great job solving your own problem!