This might be a red herring, but I had problems connecting a WinXP machine with a Win98 laptop and a Linux box running Samba. It turned out to be because WinXP sends encrytped passwords over the network, whereas earlier Windowses use plain text. Not sure if this would be the case going from XP to ME, though.
Anyway, what solved it for me was setting :
HKEY_LOCAL_MACHINE\SYSTEM\CurrentControlSet\Services\lanmanw orkstation\parameters\enableplaintextpassword
to 0 in the registry of the XP machine....
Good luck!
cbl.