Xp Client on Win2000 server

Hello
We have a windows 2000 server with about 10 clients, most of these are win98
one of these is xp pro.
The problem is XP carries on like a spoilt brat.
We go out to the internet through a netcomm 5540 ADSL router
DHCP is giveing out the External DNS servers supplied by the ISP.hen
If we give out the local win2000 dns XP logs on much faster but then can't
browse out on the internet, even if we give out a secondary dns of the ISP.
If we give out a primary dns of the ISP and local win2000 dns as a
secondary, Then XP Spits the dummy.
Win2000 server has got dns intergrated with active directory.
The settings on the forwarders tab are greyed out so I can't specify to
forward queries on.
Questions Are

1.When DHCP gives out 2 dns servers should the client try the 1st and if
queries are not resolved then try the second??

2.Is there a way I can tell the server to forward on queries it can't
resolve??

3.Is it nothing to do with dns??

Any Help on this one

Thanks