I’ve heard of a lot of people running into this issue so I figured I’d post up the fix. I ran into this myself today. I’m testing out Windows 7 and some of the servers I connect to on a daily basis are OS X fileservers. Prior to the upgrade I wasn’t having any trouble and since the servers and my workstation are both pulling from active directory so there’s no doubt that my user name and password are identical on both ends. When I would try to connect to a share I would just be continually prompted for my username and password which it would tell me was incorrect. Well it turns out there is a fix and it’s really easy to to do, just follow the directions below on your Windows 7 machine.
1. Go to the Start Menu
2. Search for: security
3. Click on Local Security Policy
4. Goto Local Policies> Security Options
5. Double Click on Network security: LAN Manager Authentication
6. Change level to: Send LM & LTLM Responses