I'm going to let you in on a secret that confounds even long time users of Samba. The file at /etc/samba/smb.conf is not the samba configuration file. It's a file that the local administrator of the box ( you ! ) uses to add to or override the default settings of samba. There is no "file" that contains the default settings there is only a way to see the defaults by running a command. Let's take "encrypt passwords" as an example.
Originally Posted by pgradone
By running the following command you can see that the default setting of Samba has that parameter set to Yes:
Unless you have encountered a bug somewhere during the install the standard smb.conf file has no affect on this state of this parameter. This command will show you the affect of the default smb.conf on that default setting
testparm -sv /dev/null | grep "encrypt passwords"
You will notice that there isn't even a mention of "encrypt passwords" in the output. You can even add it to the file ( set to yes ) and testparm will still show it missing since adding it has no affect on the default settings.
testparm -s | grep "encrypt passwords"
The file at /usr/share/samba/smb.conf is another matter and comes from the samba-common package. It doesn't come from Ubuntu it comes from the Samba factory. Why it has encrypt passwords set to No is a mystery but it's not Ubuntu's doing it's Samba's.