Hybrid Replication (2000 And 2005)

Ok here is the deal...

We have our current dev box running SQL 2000 SP3
We have two new desktop boxes that we are using as a test, they are both running SQL 2005 SP1

The Dev Box = PUBLISHER
Desktop #1 = DISTRIBUTOR
Desktop #2 = SUBSCRIBER

All three SQL Servers are using the same Domain Account to run SQL Agent and SQL Server processes.

When I try to create a publication from the publisher, while running the sp_addpublication step through the UI (or thru SQL Query Analyzer) I get the following error message:

Msg 15404, Level 16, State 10, Procedure sp_grant_publication_access, Line 136
Could not obtain information about Windows NT group/user 'crumpte', error code 0xffff0002.

So as a test I tried using our subscriber box as the publisher and had it point to the same distributor box to act as a distributor - and the publication was created fine.

It seems to be an issue using SQL 2k as the Publisher and SQL 2005 as the distributor. From the research that I have done, I found this KB article:

http://support.microsoft.com/default.aspx?kbid=830596

Which essentially says to install the latest SP for SQL 2k, which would be SP4, in the past I know there were issues with AWE memory allocation.

Q1. Has SP4 been hotfixed to resolve this AWE issue?
Q2. Has anyone here successfully setup replication from SQL 2k -> SQL 2005 using SQL 2005 as the distributor?

Thanks!