If you (still) have Windows 2000 AD domain mode running and add Windows 7 clients or Windows Server 2008 R2 server, you may experience issue when resolving user name.

Browsing the directory is successful and you can find the user/group you want to apply security but after the validation it changes to display the SID.

This is a known issue and resolved by the following fix KB 976494.

I discovered this issue while installing SharePoint 2010 for a POC; the serve is an AD 2000 domain member.