Couple of different issues here:
What you probably heard about is "Pass-through authentication." This is not the same as permissions being passed from 1 domain to another. It's usefulness mainly applies to down-level Windows clients (Win9x/ WinME). It is mainly used to allow a single sign-on to multiple domains and works in the following manner:
Domain X and domain Y each have a user account (user A) with the same user ID and password. User A's computer is set up to not specify a domain to log-on to (i.e. only provide user ID and password). User A (normally connected to domain X) provides a user ID and password at log-on that is recognized by domain X and is thus given the permissions assigned to the user account A on Domain X. Later. user A attempts to connect to a shared resource on domain Y. Because user A has already provided a user ID and password that is recognized by domain Y, user A is allowed to connect, BUT only with those permissions set for the user A account on that domain.
In this scenario, even though user A has been authenticated by both domains, he only has those permissions specific to each domain.
2. Even if you have a trust relationship between 2 domains (where domain X recognizes and "trusts" user accounts in domain Y and vice-versa), a user still only has those permissions assigned to him in each domain. In this scenario, a user could be an administrator in domain X. Even though domains X & Y have trust relationships with each other (i.e. recognize and accept user authentication), unless the user is specifically given administrator permissions in domain Y, he will be logged on as a normal user.
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