Right click on Network Neighborhood, and under "Primary Network Logon", select "Windows Logon" instead of "Client for Microsoft Networks" and or "Windows Family Logon". You might be asked for a password when you reboot, just hit enter.
If it keeps asking you for the password, do a find files search for *.pwl files, and delete the one for your users.
Windows 95 doesn't have the My Documents full functionality, but if you put a shortcut on the desktop to your files folder, everything should work.

-Bo