network issues on 2003

I'm relativly new to 2003 but I think I can hold my own on setting up a new server but I am having serious issues on a new 2003 system. I have a classroom with about 7 computers all connected to a 16 port hub. 6 of the machines run xp in a workgroup and all can see each other on the network with no problems. The 7th pc is supposed to be my lab server running 2003. The installation goes without a hitch until I try and get a few services running like DNS and group policies.
This is the 7th time I have reinstalled the OS on this machine and it always boils down to the same issue over and over again. Very strange.

After the install I attempt to promote the server to a Domain controller. A message pops up saying that it cannot contact the network to determine whether or not the domain name I want to use is already taken and then it asks whether or not I want to continue anyway. If I continue I can promote myself to a PDC with no issues. At that point if I try and manage the group policies I get errors that the network can not be reached. So I started to think that maybe I was having network issues on my own end and strangly enough I think I do.

The server is set to be a member of "workgroup" but is unable to see any of the other pc's also on the workgroup. I can ping maybe 2 or 3 of the 6 remaining members of the network but I cant see them in the network places nor can I actually connect to them. Sometimes an arp command will see 1 or 2 but never all of them. On the flip side, the xp machines cant see me either but again they can all see themselves and each other. I have replaced the nic 2 or 3 times and the cable as well as the port on the hub just to make sure its not a basic network issue.

I think my various issues with turning my pc into the lab server all center on my computers inability to actually work on my network. I have two nics in the pc, 1 is for an ouside internet connection and the other is for the lab network. All ip address are assigned correctly with the lab connection being static, since it will be a DHCP server when all is said and done, and the 2nd nic is automatic ip addressing. I can use the 2nd nic all day long and get on the internet fine with it.

What are some things I can check into that would keep my 2003 machine from getting on a simple workgroup setup?

This same machine ran just fine with 2000 server.

I will admit that I downloaded the copy but I am useing a valid cd key. I was having troubles with my orginal cds and wasnt able to boot properly off them. If the software was junk though I wouldnt be able to see the interent nor would I be able to see a random 2 or 3 machines with "arp".

Thanks for any advice.