I have tried to implement on my server this below:
The settings are successfuly set. The problem is that it is not working. I think I missed somthing.
My server is a W2k3 R2 with office 2010 fully updated. The server has a few role (Terminal Server, Printer server) and it is just a workgroup.
So the NTLM2 is working fine and way more faster than basic NTLM. Checked all the settings and looks fine. I thought the problem is starting with the password or the lack of the user in the usergoup.
Password setting method:
start --> contol userpasswords2 --> advanced tab -->manage passwords --> "gave the credidentials"