Could not remote into Server 2008 R2

So by the server saying "Your credentials did not work" that means that it's not a connection issue;  you're successfully getting to the server it's just the username or password is wrong or the account is not part of the RDP users group.

This means that it is not #1,4,5 or 6.

Can you RDP using the local admin account?

No I could not, I tried both Local Admin as well as a new local user but did not help!

Ensure that user does not have "Must change password at next logon"  set

@Tuli:
just to make sure: when you say "local user" you mean local to the server, right?
---> YES, it is local user on that server

- any special characters in the password?
----> No
can you type the password somewhere where you can actually SEE what gets wirtten? (e.g. in the username field). same keyboard layout on server and client?
-----> Yes, I tried copy paste from txt file but no luck

- no blanks before or after the username (happens here more often than expected)
------> No, it does not have

@Neil: the user had "Password never expired " setting, but no luck

what about local logon?  does that work?

Yes, it worked.

@CES IT: I reviewed the EE link but could not find this option, can you help?

.... on the general tab I changed Security layer from 'Negotiate' to 'RDP Security Layer' and I no longer need to enter credentials to start an RDP session.

If it works as a local logon, but not RDP, then it is the permissions on the listener.  

Generally, add the user to the Remote Desktop Users group and that will do the trick.  If this has been messed with, then you may want to check the permissions on the listener itself.

Hi John, thank you but still no luck, could not remote into that server :(

There are two layers of authentication in 2008 and upwards.  There's authentication with the server (NLA) and then RDP authentication for the session.  

Which one is it failing on?

Have you tried disabling NLA?  

To do this, right click 'My Computer' and select properties

Click on the remote settings link

When system properties comes up, click on the Remote tab

There are 3 selections at the bottom.  pick the middle one (Allow connections from computers running any version of Remote Desktop (less secure))

@John: Yes, that middle one option was configured but still no luck

did you not get a duplicate IP address warning?

The authentication problem was that you were logging in to serverB with a username and password for serverA due to the IP conflict.  

ServerB must have responded to the ARP request last and got it's MAC address in your ARP cache

No, I did not have a warning in the Desktop notification, I only realized this problem when typed: "ipconfig /all"

Many thanks for your support!

Problem solved after removed duplicated IP issue.