Hope you have Windows 7 Pro, as you need access to the Group Policy Editor. There are workarounds available if you have W7 Home, available on the net.
This looks a bit long winded but only takes a minute or so. Assuming you have W7 Pro, in the Windows Run dialog, type gpedit.msc
Once the Policy editor is open, in turn, click Computer Configuration - Windows Settings - Security Settings - Local Policies - Security Options.
Right click on “Network Security:LAN Manager authentication level” item and from the pop-up menu, select “Properties”
Select yje “Local Security Settings” tab and then in the dropdown box, select “Send LM&NTLM - user NTLMv2 session security if negotiated”
Click OK and close the window. Should all now work for you.