What i did was …
created dedicated user/password on my PC (i.e. network share) - it’s important that the user have a none blank password
on the WDTVLIVE, system setting, Automatic Logon to network shares=ON.
on the WDTVLIVE, network setting, enter the username and password created on your PC
IMPORTANT-IMPORTANT-IMPORTANT: if you on your PC in Control Panel / Programs & features (windows 7) have something called Windows Live id Sign-In Assistance (can’t remember the exact name, but you’ll recognize it) … UNINSTALL IT. I struggled for two full days with the login issue before i saw another thread suggesting that this should be uninstalled, and afterwards it worked
After the first successful login you are never prompted for username/password again.
Let me know if you can make it work.