I was attempting to connect through to a Windows Server 2008 R2 hosted WebApp (using Remote Desktop Services) from a Windows XP machine running service pack 3 when I hit the following error:
The remote computer requires Network Level Authentication which your computer does not support.
In order to get past this issue firstly install Windows XP Service Pack 3 and then follow these steps to enable Network Level Authentication:
1. Open Registry Editor (Hit Start > Run > type regedit > hit ENTER)
2. Find registry key: HKEY_LOCAL_MACHINE\SYSTEM\CurrentControlSet\Control\LSA
3. Within details right-click Security Packages, and then click on Modify.
4. In the Value data box, leave any existing entries and add a new entry by typing tspkg. Click OK.
5. In the navigation pane, locate and then click the following registry subkey: HKEY_LOCAL_MACHINE\SYSTEM\CurrentControlSet\Control\SecurityProviders
6. In the details pane, right-click SecurityProviders, and then click Modify.
7. In the Value data box, type credssp.dll. Leave any data that's already there and then click OK.
8. Exit Registry Editor.
9. Restart the computer.
Hope this helps someone out there.