dephcon5,
Each iSCSI LUN should *only be used by a single server* (not just at a time, but in general) unless:
All servers accessing the iSCSI LUN are using a Cluster Filesystem. W/ your NetApp I assume you're using VMDK's which are indeed cluster disk-supported based on how each ESX host (member of your DRS cluster most likely) is communicating by 'stamping' the LUN to some extent...
For windows, the iscsi LUN should be a cluster resource in cluadmin :)
OR
Your server has failed and you need to replace it w/ another, so then re-map the iSCSI LUN to a new server which replaces the original single server.
To accomplish what you're trying to do, iscsi is not a good fit in your design. If a SCSI reservation is issued, and your Win2k3 box decides to cache something on the LUN (even though you only want it to read), you could have both servers lose access to the LUN.
Your limitation is due to SCSI (not just iSCSI, as the same applies to Fibre Channel, iSCSI, parallel SCSI, serial-attached SCSI (SAS), etc).
You could:
1) Have 1 server have the iSCSI LUN, and have it create a share on that LUN for which the 2nd server reads the data.
2) Robocopy/xcopy the data to SCSI storage on the second server.
3) Just use the 1 server.
4) Use a different protocol other than iSCSI (CIFS for example given it's Windows).
5) Build a cluster and hope that the Terastation supports cluster's well (i.e. multiple SCSI initiators and the ability to manage scsi reservations appropriately ). :)
Hope this helps.