Josh Battles wrote:
obey pam restrictions = yes
Is PAM correctly configured? Have you tried it without PAM? I don't use it myself, so I won't be of much help if you need that option. As for setup tips, from the looks of your smb.conf it seems you are not using SWAT, and have started from a very old default setup. I think SWAT is nearly indispensible for beginners, and it may highlight some config details you are overlooking.