Can anyone help me on this one?

I have set my data validation (List) using a conditional statement as follows
=IF(AND(C3<>"",D3="",E3=""),OK,N_A) where OK and N_A are named ranges.

The problem I have is that the user can enter any value without getting an error message. Why is this and, more importantly, can it be made to restrict the values to the ones that appear in the drop down lists.

Using Excel 2003 and XP Pro


TIA

Ed