Employee Portal installed, but not working...

have set up a Virtual PC with Windows 2003 Std, without active directory, installed IIS, Message queues, SQL 2000 with service pack 4, Sharepoint portal services with service pack 2, .NET 1.1 and J# extension for .NET 1.1. I have installed Navision 4.01 client with Employee portal option, Employee Portal from Additional Interfaces, and have restored the demo database in SQL. In Employee Portal setup I have defined both Administrator and NEP_user as EP Users assigned to both sales and product design groups. I have not checked any of the encryption options nor have any values in the Key Managment tool. I have setup Navision Applicaiton server running under the NEP_User login (whom is in the Administrators as well as Users group - and is also a dbo for the Navision SQL database) and put in the start up paramenter of NEP and changed the company to CRONUS USA, Inc. (the company name in the NA Beta) The service starts fine if I go through the Services managment console or the Application Server mmc. I tried to use the Cronus license, but NAS would complain about not enough user sessions available. If I used my 4.0 Developer license, NAS would start normally. I also do not see any of the Emmployee Portal web parts in the default page http:\localhost\default.aspx. Nor do they work if I import them in through sharepoint. I do see all the dll’s that are mentioned in the manual, but don’t know why it is not working. Any ideas?

I have now created a new site, but now I am getting the NEP site up with the following error on all four web parts “Access Problem (1): User USNPV-SABVPC2K3\ADMINISTRATOR has no group.” I have set up the administrator on all groups (reader, web designer, contributor, administrator) and created a cross-site group with administrator in it. Could this have something to do with not having Active Direcotry???