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The 4.0 server claims in an error message that states "the trust relationship between this workstation and and the primary domain failed" and the xp workstation claims that the domain is down (at logon). However, the two IP's ping back and forth via ip but not by netBIOS name, and the neighborhood is working and the computers see each other (sharing works). The only problem is the XP station cannot logon to the domain.

Did you join the domain with the XP machine?
(my computer / properties / name / etc...)
If it's the same domain, there should be no trust relationship needed.

I have excatly the same situation. I joined the NT4 domain and computer account is visible in PDC but still i cant log on with my XP WKS

I think this will solve your problem, it solved for me
from RUN command (start |run)
type REGEDITHKEY_LOCAL MACHINE|SYSTEM|CONTROLSET 001|SERVICES|NETLOGON|PARAMETERS|REQUIRESIGNORSEAL
VALUE 0X00000001 CHANGE TO 0X00000000
CLOSE AND REBOOT
LOGON TO DOMAIN

I have two XP Pro machines that cannot even see the NT Domain controller, nor can you see the XP machines from the NT server. I tried your registry entry, as well as creating an LMHOSTS entry, installing NetBeui, disabling NetBios over TCP/IP, etc. Any clues? All other nodes, Win98/NT/2000 can see and logon to the NT domain properly.

Had a similar problem, XPpro could ping NT40 server, but could not see the server or join the domain. NT40 server could see the XP workstation. LMHOSTS file did not work for me either. My solution was to remove and reinstall TCPIP on NT40 server. If you use DHCP server, be sure to backup or write down any scope settings as you will need to reinstall DHCP server as well. I would also recommend not using NetBeui on XP, make sure NetBios over TCP/IP is Enabled, and reinstall SP6a on NT40 when you are through.

For those of you with this problem:
Had 5 Xp machines in one day with the same problem of not being able to logon. Gave me the error that the trust relationship failed between NT4.0 PDC and XP clients. Able to ping back and forth and logon to the machine and domain when not physically connected.
Solution -Make sure to disable netbios over tcp/ip
That should fix that problem though it means that it is a symptom of other problems like a bad DHCP server not sure yet

hooray. twiddling that Registry setting worked for me too. but what is it doing? curious minds want to know.

I upgraded the WinME to XPpro. I have facing the same problem. The registry setting is not work. Disable the netbios over TCPIP method is work but I can not access other PCs share afterward. Also I try to reinstall the NT4 domain controller TCPIP and apply SP6a and enable netbios over TCPIP in XPpro but no help. I am using static IP in XPpro. I have DHCP server in the network but is not in domain controller.
Also I have installed a new XPpro (not upgrade from other OS). no problem to join and login to NT4 domain.

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