I just got our VPN set up at work and I am having some issues with the Windows 98 machines. Internally, they were set up in a workgroup environment (flow) not using WINS, DNS or anything for name resolution. We set up a host file on remote workstations. XP Professional, XP Home Edition, Windows ME and Windows 2000 are having no problems accessing the file server through VPN. And the Windows 98SE machines have no problems coming in through the VPN -- but they cannot reach the folder that is shared on the server (Windows 2000). They keep trying to access the hidden root share (IPC). I've tried serveract, but no success. I've tried by IP but that pulls our intranet Web page, not the folder. I tried mapping the drive, too, but it's no good. I am able to ping by IP or name. I am not using IPsec client, just MS VPN.
You're testing my memory here! As I recall, Windows 98 cannot resolve NetBIOS names using IP addresses or DNS. So, you'll need to add the server's name to the LMhosts file. The LMhosts file is similar to the hosts file, and is located in the same directory. It may not exist by default, but a file called LMHOSTS.SAM should reside in that directory and provides instructions for creating an LMhosts file.
Good luck with it.
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