I have a common problem with Windows XP but I have tried all the usual solutions that usually fix it, so here I am.
When I try to use remote desktop connection to connect to another computer at work (2 XP workstations, 2000 Server), I get the message that the local policy of this system does not permit you to logon interactively.
I have had this problem before and it is usually on the host computer in My Computer Properties where I check to allow users to logon to this computer. I also have checked the AD on the server and everybody has terminal services permissions. Since it is not those two things, I am looking for another solution. I have concluded that it exists on the XP host computer but have tried the only solution I know.