For any people having the same problem:
After migrating smbpasswd to tdbsam (see Configuration Changes: http://www.samba.org/samba/history/samba-3.4.0.html), the Windows XP machines can log in again.
Windows 7 machines join after doing the following:
Adding the machine:
sudo useradd -g mysambagroup -d /dev/null -s /bin/false machinename$ (with the '$'!)
sudo smbpasswd -a -m -i machinename (without the '$'!)
Setting registry entries according to: http://wiki.samba.org/index.php/Windows7
EDIT: Thanks to #ubuntu-server and #samba on freenode!
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