Server 2003 GPO not applying to OU

I recently installed server 2003, and have XP clients … I created a new OU and created a Group Policy for the OU but the GP does not seem to be applying. When I make changes to the default Policy, those changes work… so why doesnt the New Policy take affect? I have updated the policy on the XP client but only the default policy changes work…. what do I do?