Look at the IIS security settings. If this is an Intranet and the users have 1) logged into the domain and 2) are members of the site, they shouldn't have to log in at all. If this is a public-facing portal and has IIS security, they'll have to log in.
Sharepoint has a number of licensing requirements. The most expensive by far is that which allows you to open a Sharepoint portal to the public Internet. The link is for the latest version, but you can find information on SPS2003 licensing in the same general area.
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