Sounds like the problem is occurring before Kix32 is ever run.

1. How do you reference the logon.bat (or whatever name you use) in your user profiles?
2. What happens when you copy Kix32.exe, Logon.bat, and logon.kix files to a local directory on a Win2K machine and run them?
3. How are you trying to run the logon.bat file when testing. Do you double-click on it from Expolorer or run it from a CMD session?
4. Do you set the environment size parameter for CMD anywhere in your environment?
5. Is the code you posted the entire contents of your logon.bat file? Can you post your kix script as well? I know it seems nit-picky, but I can't count the number of times the pros on this board have found an error in the actual code of the batch and/or script files posted, even when the poster was ultra-confident that the problem couldn't possibly be their code.

Thanks,

New Mexico Mark