The problem appears to be that we had duplicate SPN's configured.

setspn -x identified the problem.

You will still need the locking hints in order to avoid duplicates, i.e

INSERT INTO mytable ([id]) SELECT coalesce(((SELECT TOP 1 [id] FROM mytable WITH (UPDLOCK,HOLDLOCK) ORDER BY [id]...

Shaun, your solution does not mimic an identity column in a multi-user environment,

i.e. it does not guarantee uniqueness - two users requesting the nextID value at the same time...

"Sounds like a home work question.

If so you failed, otherwise you need to read a good T-SQL book and practice your craft":

Shaun,

It is...