[Dovecot] authentication

[eric]

Good evening from Aotearoa;
First some details:
Clients are all Outlook2003 on XP yawn
Server is Suse 9.3 Samba, postfix, fetchmail and dovecot 1.0 rc13
I succesfully installed Dovecot on my test network at home, but at the 
job site its a mystery.
I seem to be able to get one client to authenticate but not another.
And only if i created a password file consisting of logins and no passwords.
Dovecot won't use standard unix passwd successfully.

So here is the conf:
base_dir = /var/run/dovecot/
protocols = pop3
listen = *:110
disable_plaintext_auth = no
ssl_listen =
ssl_disable = yes
login_dir = /var/run/dovecot/login
login_user = dovecot
login_greeting = Dovecot ready.
mail_extra_groups = users mail
last_valid_uid = 2000
  pop3_uidl_format = %08Xu%08Xv
protocol lda {
  # Address to use when sending rejection mails.
  postmaster_address = postmaster at example.com
}
auth_username_chars = 
abcdefghijklmnopqrstuvwxyzABCDEFGHIJKLMNOPQRSTUVWXYZ01234567890.-_@
auth_debug_passwords = yes
auth default {
  mechanisms = plain
  passdb passwd-file {
    args = /usr/local/etc/passwords
  }
  userdb passwd {
  }
  user = root
default_mail_env = mbox:/var/spool/mail/:INBOX=/var/spool/mail/%u

And here is a sample of two of the syslogs.:
I am not worried about the UID warning,I was try to login on from 
various clients. Though this is not a requirement.
Sample of Mail log

Nov 30 18:30:27 SCSIServer dovecot: POP3(user): Couldn't open INBOX: 
Internal error occurred. Refer to server log for more information. 
[2006-11-30 18:30:27]

Nov 30 18:19:50 SCSIServer dovecot: pop3-login: Login: user=<user1>, 
method=PLAIN, rip=192.168.1.113, lip=192.168.1.199
Nov 30 18:19:50 SCSIServer dovecot: POP3(user1): UIDVALIDITY changed 
(1164764972 -> 1164774199) in mbox file /var/spool/mail/user1
Nov 30 18:19:50 SCSIServer dovecot: POP3(user1): Disconnected: Mailbox 
is in inconsistent state. top=0/0, retr=0/0, del=0/0, size=0
Nov 30 18:20:04 SCSIServer dovecot: auth(default): client in: AUTH    
1    PLAIN    service=POP3    lip=192.168.1.199    rip=192.168.1.113    
resp=AG9saXZpYQA=

Nov 30 18:20:46 SCSIServer dovecot: pop3-login: Login: user=<user2>, 
method=PLAIN, rip=192.168.1.115, lip=192.168.1.199
Nov 30 18:20:46 SCSIServer dovecot: POP3(user2): open() failed with 
index file /var/spool/mail/.imap/INBOX/dovecot.index: Permission denied
Nov 30 18:20:46 SCSIServer dovecot: POP3(user2): open() failed with 
index file /var/spool/mail/.imap/INBOX/dovecot.index: Permission denied
Nov 30 18:20:46 SCSIServer dovecot: POP3(user2): Couldn't open INBOX: 
Internal error occurred. Refer to server log for more information.

Warn log;

Nov 30 18:30:27 SCSIServer dovecot: POP3(user2): open() failed with 
index file /var/spool/mail/.imap/INBOX/dovecot.index: Permission denied
Nov 30 18:30:27 SCSIServer dovecot: POP3(user2): Couldn't open INBOX: 
Internal error occurred. Refer to server log for more information. 
[2006-11-30 18:30:27]

It just occured to me these leading blanks in the conf file may effect, 
I am sure I read that somewhere to do with one of these things?

Any other ideas would be greatly appreciated.