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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?

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