IAS on 2000 server

I am trying to configure a win 2000 server as a radius server. I have configured ias to support this and it works using PAP. The 2000 server is a file server / member of an NT 4 Domain. I would prefer to use CHAP for encrypted authentication. I noticed that this is not supported with IAS on nt 4 but it is with WIN 2000 IAS. Is the fact that the 2k server is a member of the nt4 domain the reason for this not working or could it be something else?? I have re-entered secrets and checked confirmed type case.