Ok folks, after much beating my head against a wall, I finally figured out how to fix this pesky error for trying to connect to your PC from a Mac.
I am using XP SP2.
Do the following from the PC:
Control Panel>Administrative Tools>Local Security Policy
within that window go to Local Policies>Security Options
There is an entry called:
Network access: Sharing and Security Model for Local Accounts
Double click it. Select from the drop down menu: Classic - local users authenticate as themselves
Viola! You can now connect to your PC.
I am using XP SP2.
Do the following from the PC:
Control Panel>Administrative Tools>Local Security Policy
within that window go to Local Policies>Security Options
There is an entry called:
Network access: Sharing and Security Model for Local Accounts
Double click it. Select from the drop down menu: Classic - local users authenticate as themselves
Viola! You can now connect to your PC.