I believe xp passwords are plain text unless you go over 15 digits and its alpha numeric, or you have edit the reg to turn of LM passwords.

edit: heres the link to the info. 15 characters is key because it automaticaly disables lm passords, which also will disallow 9x/me machines from accessing that pc via lan.(they require lm passwords apparently.)

http://www.microsoft.com/resources/d....mspx?mfr=true