I recently ran across a scenario where SSO stopped working in a parent/child SSP farm set up. In this instance, there was one farm. A new parent SSP farm was created. SSO was configured there. The child farm was connected to the new parent farm. All the content stayed in the child farm, except for My Sites, which are now owned by the parent SSP. All web parts utilizing SSO in the child farm stopped working, while web parts using SSO on My Sites functioned. The issue is caused by the caching of SSO credentials in the SharePoint configuration cache. Resetting the configuration cache on machines in the child farm corrected this issue. To reset the configuration cache, do the following steps.
Stop the OWSTIMER services via services.msc
Navigate to the following directory
Server 2003 location: Drive:\Documents and Settings\All Users\Application Data\Microsoft\SharePoint\Config\GUID and delete all the XML files from the directory.
Server 2008 location: Drive:\ProgramData\Microsoft\SharePoint\Config\GUID and delete all the XML files from the directory.
Delete all the xml files
Edit cache.ini and reset the number in the file to 1
Start the OWSTIMER service on the server and ensure XML files to begin to reappear in the directory
It may take a minute or two for timer jobs to pull settings from the configuration cache as well, so have little bit of patience.