security tab problem

This particular windows XP seems to be functioning perfectly except when one
want to change security access via the windows explorer GUI

the security tab add user/"security group" will not recognize built-in
users, power users, and non built-in users/ groups. the cacls does work
fully through.

At one time this PC was part of an NT domain, but is now just part of a
workgroup, say abc-com.. also ms Virtual server was installed on it before

what can be done to fix up the security tab problem?

Your help is much appreciated. thank you .