This is what we did after some study/experiments to get the subject going at ur end:
In oracle 8.1.5 even when you set OSAUTH_PREFIX_DOMAIN to TRUE in the server registry, it does not seem to validate your domain, whereas this seem to work perfectly in oracle 8.1.6
For example, when you create an external oracle user called "DOMAIN\USERID" eg. SERVER1\abcd where "abcd" is a user in that domain SERVER1 (viz. DOMAIN\administrator, in ur case) and try to login to oracle 8.1.5, it does not seem to recognize the domain SERVER1, it only looks for user "abcd". Hence when you create a user called "abcd" without the domain, oracle authenticates it.
We’ll have to set SQLNET.AUTHENTICATION_SERVICES = (NTS) in the sqlnet.ora file on both the server and the client to make authentication work in Oracle 8.1.5.
In Oracle 8.1.6 SQLNET.AUTHENTICATION_SERVICES = (NTS) is the default setting in the sqlnet.ora file.
Set the NT registry variable HKEY_LOCAL_MACHINE\SOFTWARE\ORACLE\OSAUTH_ENFORCE_STRICT to TRUE on the server to enforce the adapter to verify the operating system's user account's membership to one of the following Windows NT local groups ex. ORA_USER i.e. Create a local group called ORA_USER on the database server and assign users to the group
Set REMOTE_OS_AUTHENT=FALSE in production server for better security. Make this true in develop environment so OS authentication of oracle Users with/without domains is possible.
Give me more inputs if u have successfully configured....