I finally got everything setup, I see from phpinfo that the module is being loaded.
I added to my site configuration,
AuthName "NTLM Authentication thingy"
NTLMAuthHelper "/usr/bin/ntlm_auth --helper-protocol=squid-2.5-ntlmssp"
I get prompted for the username and password as I should, but after entering in anything, I get a 500 internal server error. I don't see anything in the log files that sheds any light on this. The server is running Ubuntu 8.x, and Apache2 with PHP 5.x
Any help is greatly appreciated.
I figured this out. The problem was I forgot to add www-data user to the winbind group.