Authentication / Username Question

Why is it that . . .

When I create a new user in my win 2003 enterprise domain (eval), with a specific “User logon name” ((Test One) for example) and a slightly different “User logon name (pre-Windows 2000)” ((TOne)for example)

When I go to a workstation (XP or 2k) to log on using this new accout,

It allows the pre windows 2000 username of “TOne”

I can log on using “Test One@contoso.com”

But when I try typing “Test One” in the user name field it gives the error “The system could not log you. Make sure your username and domain are correct, then type your password again.

I have correctly selected the domain in the “log on to” box ??

Any suggestions ?

Is it to do with the domain functional level ?
I havent raised it or altered it since recently installing it.