When you try to use Disk Management to assign a drive letter to a Windows Server 2003 volume, the drive letter is not assigned.
This behavior will occur if the disk is a basic disk and the volume is locked.
NOTE: This behavior will NOT occur if the volume is locked but the disk is a dynamic disk.
To workaround this behavior, remove the lock from the volume. See if at NET FILE helps you close the process that has the volume locked.