Windows Server 2003: Log in as a domain user, but unable to set permissions for domain users

Windows Server 2003: Log in as a domain user, but unable to set permissions for domain users

I have a very simple network that has one domain controller (Win Server 2003) and one other computer that is part of the domain (also Win Server 2003). This other computer will allow me to log in as a domain user, but when I am trying to set permissions on some shared folders, it won't let me set permissions for domain users; only local users.