Consider the situation where you have a multi-domain forest with MOSS/Sharepoint installed in a child domain. You need to be able to pick users from the entire forest and not only from child domain where Sharepoint is installed, but you can't. If you use people picker from Central Administration site then you are able to find users from entire forest.
Check if your people picker for that particular web application is configured correctly by running this command:
STSADM.exe -o getsiteuseraccountdirectorypath -url http://intranet
If you get output like this:
Then you need to run the following command to change the people picker search scope to search the entire forest:
STSADM.exe -o setsiteuseraccountdirectorypath -path "" -url http://intranet
The setuseraccountdirectorypath property is actually intended to allow you to limit people picker searches to a sub OU, but in a multi-domain environment it is limited to domain level by default in MOSS 2007. So if you need to search the entire forest, you need to set directory path to "" like it is set for Central Administration web application.