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How to get Group Password Policy not to affect local user account on some XP clients

We are getting ready to implement a Group Policy Password Policy.  But during our testing we noticed that not only do domain accounts get affected but so do local users.  We have an application that when it installs it creates a local user on the client machines (XP Pro boxes)  The password that must be used for this account does not meet the minimum requirements for our Group Policy Password Policy.  Is there a way to disable the policy for local accounts?
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bluntTony
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Ok... I have some more info bluntTony I believe you where on the right track with what I was trying... Testing this on two PCs one is local on our network another is at one of our remote sites... I don't think AD has replecated completely yet to that locations DC.  The local machine I have move back and forth a couple of times in the origial OU and the new and when its in the new I can use a 5 character local password... The remote machine still hasn't caught up.... Will post additonal info later.
OK, let us know how you get on.
One thing - you shoudn't need to block inheritance. As long as you set conflicting account policies at the OU level, they will supersede the domain liniked policies. If you block inheritance, you're blocking ALL policies linked higher up.
Tony
had to do a little extra work with the group policies to get updates but in the end what I did in all my steps worked...   Thanks push in the right direction.