MSDTC, Active Diretory, DAO, And Transactions

If this is in the wrong forum, my apologies.
Here is the situation. We have a .Net application that someconsultants developed several years ago. They made use of DAO fordatabase access, using some inbuilt classes like ContextUtil to get atransation environment.
Until last weekend, the envorinment was:
Web application on IIS5 / Windows 2000 Advanced Server
Database on SQL2000 on Windows 2000 Advanced Server
We switched over to a new database server environment - a cluster oftwo Windows 2003 servers wth SQL Server 2000. This requiredActive Directory to be set up on the two database server machines.
Everything worked but this particular application - where it goes toupdate the database. It appears (but since I haven't yet beenable to rebuild the .Net solution) that the error - "Object referencenot set to an instance of object." is in fact a spurious error causedwhen the transation tries to roll back.
I have spent about 10 hours on this, and have come to the conclusionthat the fact I have MSDTC involved on a database server that is in anAD domain, while the web server that is issuing the transaction isoutside that domain is the cause of the problem. Now, I don'twant to put AD on the IIS 5 web server - we are migrating this to a newWin2k3/IIS6 server in 5 or 6 weeks time.
Any suggestions? If I have to, I can move the database for thisparticular app back to the non-clustered Windows 2000 server (which isalso outside the AD domain).
Thanks for your indulgance.
Microsoft requirement and good practice is a database Server is just a member server, it should not have anything to do with AD users. If your application is using DAO(data Access object) which was obselete in 1998 you may need MSDTC, the error could be you have not properly configured distributed transaction in SQL Server. Run a search for distributed transaction in the BOL(books online). The advice keep your application from none database users and AD. Hope this helps.