I had this problem with one of my clients, who upgraded the schema to Windows 2008 without installing even one Windows 2008 Domain Controller after. My client wanted to use the new group policies for Windows 2008 Terminal Server, so he upgraded his schema and edited the policies from Group Policy Management Console of his Vista computer to edit the new policies. Well, why I’m telling you all this? This is the only connection that I had found that explains why this problem happened. Well after some googling and trying to play with credential delegation I’ve found this article http://support.microsoft.com/kb/939820 . There is a Hotfix that you should apply on all of your 2003 Domain Controllers and that will fix your problem. Don’t forget to backup before applying.