It appears that I am not having the DACL issue (or anymore), but rather the following:

Application Log
Event ID: 1450

The description for Event ID ( 1450 ) in Source ( KIXTART ) cannot be found. The local computer may not have the necessary registry information or message DLL files to display messages from a remote computer. The following information is part of the event: UserGetInfo failed Error : Insufficient system resources exist to complete the requested service. (0x5aa/1450).
http://www.microsoft.com/technet/treeview/default.asp?url=/TechNet/prodtechnol/ntwrkstn/maintain/operate/admin.asp

Application Log
Event ID: 1450

The description for Event ID ( 1450 ) in Source ( KIXTART ) cannot be found. The local computer may not have the necessary registry information or message DLL files to display messages from a remote computer. The following information is part of the event: UserModalsGet failed Error : Insufficient system resources exist to complete the requested service. (0x5aa/1450).
http://msdn.microsoft.com/library/default.asp?url=/library/en-us/debug/errlist_7oz7.asp

Application Log
Event ID: 1332

The description for Event ID ( 1332 ) in Source ( KIXTART ) cannot be found. The local computer may not have the necessary registry information or message DLL files to display messages from a remote computer. The following information is part of the event: LookupAccountSid failed Error : No mapping between account names and security IDs was done. (0x534/1332).
http://msdn.microsoft.com/library/default.asp?url=/library/en-us/debug/errlist_7oz7.asp

Application Log
Event ID: 1450

The description for Event ID ( 1450 ) in Source ( KIXTART ) cannot be found. The local computer may not have the necessary registry information or message DLL files to display messages from a remote computer. The following information is part of the event: UserGetLocalGroups failed Error : Insufficient system resources exist to complete the requested service. (0x5aa/1450).
http://msdn.microsoft.com/library/default.asp?url=/library/en-us/debug/errlist_7oz7.asp

Machine stats are -
System Manufacturer is = Compaq
System Model is = Deskpro
System Serial Number is = xxyyzz
System BIOS Version is = 686P3 v2.11
System BIOS Date is = 19010405******.******+***
CPU Speed is = 1000 Mhz
System Memory = 255 MB
Dimm Size (0) = 0 MB
Dimm Size (1) = 256 MB
Video Card is = NVidia Riva TNT2
Video Res is = 1024 x 768 x 65536 colors
Modem is = U.S. Robotics 56K FAX EXT
Network Card (0) is = Intel(R) PRO/100 VM Desktop Adapter

C: drive 1.4 GB Free (NTFS)
D: drive 11.5 GB Free (NTFS)
Windows 2000 Professional (SP-2)

Thanks for any insight to this.

- Kent