If you receive the error “The local security policy does not allow you to log in interactively” when trying to login to a virtual machine instance in Microsoft Virtual PC running in Windows XP mode you simply need to add the target user to the remote desktop user group on the virtual machine instance. Also, make sure that the remote user group is allowed to logon interactively (local), which is set by default.
Solving error “interactive login denied” in Microsoft Virtual PC running in Windows XP Mode
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Glad I could help 🙂
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