The 'line' should be drawn via technical and customer need, not determined by the legal/marketing division of MS where so many currently are, and that's my point. MS has backed off the pressure to kill Server 2003 realizing how much is broke on 2008, but if they had their way Server 2008 would only talk to Server 2008.
I'm not entirely disagreeing with you, and I'm only one of a million system admins that get sick of supporting legacy platforms in AD and having to make allowances for them. NT4 in a Win2K domain was bad enough. Oops....GPO's configured with Server 2008 or Win 7 aren't applying to XP boxes.
However, the flip side is that Microsoft has made it clear they want every business with more than two computers to either be running SBS and AD, and/or their own Exchange Server, ISA Server, blah, blah, blah. Net result of this is simple networking on Windows is gimped and Microsoft hasn't got this to work reliably since effing NetBEUI.
In a nutshell, if you aren't running AD, you're screwed, and not every Windows based computer in a professional environment should be AD centric. NTLM is irrelevant in a workgroup environment anyways, and once a box gets compromised it's equally so. At least MS got smart and stopped with default Admin$ shares all over the place.
Another suggestion for the OP is to install a basic third party FTP server on the Win2K box and by-pass all the MS junk anyways.
Just to post a counter point:
My 2003 servers (they were AD servers at one point also) participate in my 2008R2 network without issue. Actually I have not found a single issue so far that could be attributed to "2003 / 2008 won't talk to each other" Actually things like DFS, DFS-R, AD based DNS zones, DHCP etc all worked with out a complaint.
I have been using "2008" style GPO on 2003 / XP / 7 for about 18 months prior to moving the servers to 2008R2. Roll out the XP / 2003 Group policy extensions. This is an example actually what people always say MS "never does." The patched XP and 2003 to handle the new GPO style. You can even roll it out via WSUS which is also free. There is no excuse that even the smallest company should not have a WSUS server available. You can stick in on a machine with 512mb of ram and 60GB of disk even.
Microsoft has tried to improve the home experience. Look up Homegroup. The issue is people will not give up on XP. (As a side comment, in my home network, my XP boxes that live on old junk machines that I really should replace... connect and stream from the 7 boxes with out an issue. Biggest thing I see is a 30 second delay from XP > 7 when it first asks for credentials.)
When it comes to business, AD is by far superior to a workgroup. I would rather spend the $300 and pick an SBS box license than deal with the password and performance issues that appear when everyone is on a workgroup. I have tried to support 50 person peer to peer networks. It is not good, does not work well and made me waste more time running around fixing issues causes be "suzy in accounting" changing her password that now doesn't match the server(s).
Also NTLM is used in workgroups. When is asks for a password, it uses NTLM to authenticate. Don't confuse things like the NTLM integrated authentication engine in Samba (which is used to do domain authentication) with the local NTLM authentication it does.
The line by the way was drawn by consumer need. I need features that are in 2008 vs say 2003 / 2000 and NT4. I am sure if enough people banded together and offered to send MS $$$ every year to keep supporting 2003, they would be happy to do it.
Also many of these points have similar points on the Linux side. I remember when people "wouldn't let them tear the 2.2.x kernel out of their cold dead hands" same with 2.4 > 2.6 etc. When the 'free' software world is also passing you by, you may want to review your IT goals.
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