I do use it, though, at it works fine mostly. I've heard it explained
that the reasoning for avoiding TDBSAM is that if you're running a PDC,
you probably also need features not provided by TDBSAM. In many cases,
that isn't exactly accurate. We have MANY users, but our needs are
fairly simple (and there are few workstations -- it's just a public lab).

I prefer LDAP, but if I was to choose between smbpasswd or tdbsam I would definitely go for the later.

The reasons why tdbsam is better are clearly explained on the Samba documentation. See:

Samba3-ByExample
Samba3-HOWTO

Search the PDFs for "backend" and you will find plenty of information.

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