SQL 2005 && Windows Password Policy

We run a few shared hosting servers in the UK, now we used to run mssql 2000 and moved to 2005 in december 2005.

Microsoft SQL 2005                                      9.00.1399.06
Microsoft SQL Server Management Studio      9.00.1399.00
Microsoft Analysis Services Client Tools      2005.090.1399.00
Microsoft Data Access Components (MDAC)      2000.086.1830.00 (srv03_sp1_rtm.050324-1447)
Microsoft MSXML      2.6 3.0 6.0
Microsoft Internet Explorer      6.0.3790.1830
Microsoft .NET Framework      2.0.50727.42
Operating System      5.2.3790

We were in the process of improving security on some of our new servers, in the windows password policies settings we enabled the following
minimum password length = 6 characters
Password must meet complexity requirments = enabled

sql 2005 authentification was set in mixed mode, but we have tried windows authentification only as well.

Now when you try and add a new user even if the password meets all requirments you get an error password is to short etc, we used sql managment studio both manually creating a user and scripting with sql, both with the same result.

In the shared hosting environment we need passwords to be secure, the only way we can get sql users to be created is to disable windows password policies which causes security problems.

We would prefer to use sql authentification not windows but even when we use sql authent it still seems to use the windows password policy and the same error occurs

has anyone else found this problem?

could do with a fix asap!