Is the user  ID associated with a Local Admin group?

I'm not sure I fully understand domain vs local users  and groups, but
here's what I've found so far:

-On the pc where I'm testing (which has windows NT) when I go into
User Manager and check to see what groups the user  is in (which I
THINK are local groups), the user is NOT in the Administrators group,
only in the Users group.

-On the Sharepoint server pc itself (which has windows 2000), when I
go into Computer Management (which, I'm assuming, is similar to User
Manager in NT - I can't find  a User Manager in the program list)and
open "Local Users and Groups" and open  "Groups" I find an
Administrators group. When I open that group and look at the Members
list I find 2 entries:
1.Administrator
2.[Our test domain name]\Domain Admins
I don't know where to go to even find the "Domain Admins" group to
see if the user in question is in there, and I don't know if this
even matters...

Don't know if this info gives you the answer you need or not.

Try this:

Have your NT admin create an account called SPSTestReader for the general
domain of your company.

Go to the SPS box and launch the SPS administrator MMC

Access the properties of the default workspace

Click on the security tab

Click Add then browse to the domain of the SPSTestReader. Highlight the
users name and click  add. Click OK and then ensure that this user  is set to
Reader.

Reboot the SPS box. Since this is a development box it is fine, if it was
production box or later in the deployment cycle I would have you restart the
IIS Admin service but let's try to eliminate all possible causes.

Now go to the remote box and log  on as SPSTestReader for the correct domain.

Try to access  the site.

Tell us what happens --

** On a side note, I often log on as SPSTestReader so I can see exactly what
my users/readers are seeing.