OK... let's take this step-by-step and see if we can figure out what is happening here.

When you tried to execute locally, you got a 'failed to find/open script' error. Try this:

1. Copy your logon.bat, logon.kix, and kix32.exe files from your domain netlogon share to your c:\temp directory.

2. From a command prompt execute the following commands (make sure you are not using a domain admin account)
c:
cd \temp
net use (one of your script-mapped drive letters:) /dele
net use (confirm the drive was deleted)
logon.bat
net use (confirm the drive was re-added)

3. This should run the local script and re-map the drive (confirming the script ran OK).

If that works, map a free drive letter to your netlogon directory. I.e. Net Use X: \\mypdc\netlogon

At the command prompt, type the following:
X: (Substitute the letter you mapped to the netlogon share)
net use (ScriptMappedDriveLetter:) /dele
net use (confirm the drive is deleted)
logon.bat
net use (confirm the drive was re-added)

Again, the problem seems to be that your 2K clients aren't even getting to the point where they run the script rather than internal script errors. (Though I'd still heed the advice given about $$ vs. $ and trying to map a directory under a share. Sometimes you can get away with bad syntax in KiXtart. It is pretty forgiving. But the $$ thing is just the way KiXtart differentiates a $ symbol from the start of a variable.)

Also, I notice you are running KiX32.exe from the netlogon share. Since we run a pure NT/2K network, I haven't had to wrestle with Win 9x and KiXtart issues. But it seems there are differences in which files need to be present, which is one reason the file(s) are copied to the local workstation and executed there. There are also significant speed advantages to running a local KiX32 executable. I don't think this necessarily has anything to do with the current problem, but you might want to keep it in mind for future improvements.

This is probably a very simple problem that will become obvious when we track it down. Sometimes those are the hardest to find, though.