Win 2000 Server with win Xp desktop access denied error

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I have a new server running MS Win 2000 with 4 desktops running MS Win XP. The problem I have is when logged into the network users do not have any permissions to do anything! Can't write to the HDD, change date & time, create and save files!

I have given them every permission on the server I can think of, still no go. I also cannot make their logon ID's administrators (or power users) on their desktop. I have turned off the firewall on the desktops (router has a firewall).

I am at a loss on what to do next. This is critical for running the office!
Any help appreciated.
 
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