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It may likely explain: What are the perms on the .rhosts? If usertest cannot read the file, that may well explain why... What about the home directory's perms?
But main question, why was a proper...

It should be in machineB that you add the given line in .rhosts:
machineB... in machineA .rhosts
machineA.. in machineB .rhosts
To see if it works correctly I would just do a remsh machineA -l...