Fixed it!

We had all of the requried dll's that W9x needs in the same folder where 2000/XP logon from.

Instead, we created 2 subfolders inside netlogon (eg. w9x, and wnt). We then created a batch file which determines the users OS and then points them to the correct folder for their script. If it is a 9x computer, it will find all the dll's it needs in the w9x folder along with kix32, etc. It if is a Wnt computer, it only needs the script.