I just wasted 2 hours because I was having authentication problems connecting to Windows XP/2003 network shares from Windows 7. It turns out that by default Windows 7 attempts to use NTLMv2. As a result you get a ‘Invalid user or bad password’ error continuously.
To solve this I had to open up secpol.msc using the ‘Run’ command. I then went to ‘Security Settings -> Local Policies -> Security Options -> Network security: LAN Manager authentication level’. I set this to ‘Send LM & NTLM – use NTLMv2 session security if negotiated’ and this solved all my issues.