i dont think the problem is in the conf file as it is pretty generic. the error message you posted is pretty clear i think, the daemon can access/read the conf fille. only a few reasons for this:
1) are you starting smb/mnb as root?
2) what are the permissions on /etc/samba/smb.conf? try chmod 777 /etc/samba/smb.conf
(be sure to reset the permissions after testing!)
3) does /etc/samba/smb.conf exist? is it empty?
4) check the directory "/etc/samba" permissions
Now I can start samba using /usr/sbin/smbd directly
if you starting it directly then you are never touching /etc/init.d/smb. that is only used when the computer is starting (switching runlevels) or when you use service smb start