From Control Panel open Administrative Tools then Local Security Policy.
Expand Local Policies and click on User Rights Assignments.
In the right hand part of the screen (the "Contents Pane"), look at the following entries:
1. Access this computer from the network
Make sure that "Everyone" is in the list for both Local and Effective settings.
2. Deny logon locally
This should be clear.
3. Log on locally
This should contain "computername"\Guest, Users, Power Users, Backup Operators, Administrators.
Do you have the above?