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This behavior can occur if the account you are using to connect with has a null (blank) password. To work around this behavior so you can establish Remote Desktop connections, log on at the console of the computer, and then set a password for that user account so that it no longer has a null password.
You can disable blank password restrictions by using a policy. To locate and change this policy:
Click Start, point to Run, type gpedit.msc, and then click OK to start the Group Policy Editor.
Open Computer Configuration\Windows Settings\Security Settings\Local Policies\Security Options\Accounts: Limit local account use of blank passwords to console logon only.
Double-click Limit local account use of blank passwords to consol logon only.
Click Disabled , and then click OK.
Quit Group Policy Editor.
NOTE: By default, this policy is on (enabled).
Good luck.
Maxwell
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