Well....
I installed Xubuntu 8.10 on the 40Gig HD and its running fine. I had no problems with samba and i can browse the server from both my XP home machine and the wireless laptop running vista.
I used this
guide page. The mistake i make was not putting workgroup = WORKGROUP
If you are using 8.10 i wouldn't recommend the rest of this guide, it is clearly outdated with the new version and some of the directions just don't exist. For example, the VNC instructions.
Which leads me onto my current problem. I cannot remotely connect to the Xubuntu machine from my XP home machine.
1. Both are permissioned for remote connection
2. "sudo tcpdump -v port 5900"

(<<learning!!) shows that when i attempted to connect the Xubuntu machine "heard something" but i get "failed to connect to server" when i try and connect thru tightvnc.
3. i can ping both machines in either direction.
It is possibly a tightvnc or vino setup issue on the Xubuntu machine but i haven't found someone else in my situation to find help ... yet
**ON a side note, i can't see my other HD anywhere? is there something i need to do? and how do i then format it ready for my music and video? Thx