log on locally

I need to configure a user for log on locally rights on a 2000 domain controller. I followed the instructions in MS technet article http://support.microsoft.com/?kbid=234237
After I tried it, my normal users could not log into thier workstations on the domain. The error “can not log on interactivly” would occur. The only group I picked to add in step 8. is the FTP security group I created.
To allow any users to log on to thier workstations I had to go to the properties of the default domain policy was to uncheck apply for authenticated users.
Any suggestions?
David