So I am now guessing that this would be different than the hosts config from genesis. Sorry I'm not in front of the machine to check for sure.
Yes, it's different. It's usually necessary to have both set up if you want to run Samba properly, at least on the Amiga version. (Although I had to set up lmhosts on Debian too, so...)
I am currently running it from inetd. You're saying I should disable it in inetd and run it from a script? Also another question since you have a good grip on this. How do you stop it once you've run it as a daemon?
You can do it either way. The advantage of running it as a daemon is that you won't get disk access every time the netbios port is accessed and the nmbd client is run again (which isn't really that often, btw). The only real disadvantage is that you lose some ram because it's always loaded. I personally run as a daemon from a Miami startup script, but either way is fine.
To break the nmbd client running in daemon mode, just use AmigaOS c:break, send it a control+C, or use Scout or some similar tool to break it just like any cli tool.
One more thing: if, when you try to run nmbd -D from a shell and it just returns and seems to do nothing, you may have a broken compile. Some of the beta versions of Samba on the AmigaSamba site don't work. If you don't have any of these, don't worry. If you do, I recommend the stable build, at least until you have things working.