Hari Om!
Problem is that sanskrit2003 font actually includes 2 different "set of fonts"; you can see that by opening the .ttf file with fontforge or fontmatrix (under Linux).
So to use devanagari/sanskrit fonts you have to change the input language (keyboard language).
To do this:
Windows (Xp):
control panel --> regional and language options --> languages tab --> flag "Install files for complex script and right-to-left languages.
Give apply/ok and let Windows install files.
Then go back to the same tab and clic the "details" button: in the "Text services and input languages" dialog box (settings tab), clic on "add", choose and then set "sanskrit - devanagari - INSCRIPT" as the default input language.
In the same tab you better choose in the preferences --> "language bar" your preferences, so to show language bar switch in the application bar (you can also add this through right-clic on the application bar --> toolbars --> language bar).
Give ok on every dialog box.
Linux (under Debian Lenny/Gnome - other distros/DE should be more or less the same):
system --> preferences --> keyboard -- disposition (layouts) tab --> add hindi (or indian) layout and set as default.
Close everything
Page 108 of the itmanual2003 could be useful. You can find it
here.
Remember to go back to your default input language, after using sanskrit2003 fonts!
Namastè!