Error Message: Access Denied; Specified User Is Not a Member of TelnetClients Group

When you attempt to connect to a computer that is running Windows XP Professional, you can receive the following error message:

This behavior can occur because Windows XP, by default, forces all of the incoming network connections (except when they are joined to a domain) to a "guest" level of access. This default behavior ensures that an incoming connection has only guest-level access even if a username and password is specified. NTLM automatically authenticates any network connection that uses the local account credentials as a guest.

To work around this behavior, change the default behavior to enable the local administrator and the members of the TelnetClients group to connect to the network with their proper identities, not as guests:

1. In Control Panel, double-click Administrative Tools.
2. Click Local Security Policy.
3. Locate the policy in the "Security Settings\Local Policies\Security Options\Network Access: Sharing and security model for local accounts" folder.
4. Right-click the policy, and then click Properties.
5. In the box, click Classic - local users authenticate as themselves.
6. Click OK.

This behavior is by design.