Windows forces Guest user login when connecting through a local network

This took me ages to find out, so here is the solution for the benefit of everyone who is having a similar issue:

Problem:

In a local Windows-based network you are trying to connect to a machine (e.g. in order to browse its local file storage). When connecting, it offers you to connect as Guest user only and does not offer you the option to connect as a local user of the target machine (which is what you would normally want).

Solution (in brief):

In your local security settings, find the policy for "Network access: Sharing and security model for local accounts" and set it to "Classic – local users authenticate as themselves".

Step by step solution:

Note: this is written for Windows XP, but the solution for later Windows versions is probably very similar.

Say, you want to copy some files from your laptop's C-drive to your desktop PC. Assuming, wlog, that your laptop has a local IP address 192.168.1.100, you can open the file explorer on your desktop PC and type the following into its address bar:

\\192.168.1.100\c$

You will be prompted for username a password. Once authenticated, you will be able to browse the laptop's C-drive as if it was a local hard drive of your desktop PC and copy any files across as you wish. To access the laptop's D-drive, you can use \\192.168.1.100\d$ and so on.

Important is that when authenticating for access you need to provide a valid username and password for a user who is set up on the target machine (i.e. the laptop), not for a user configured on your desktop PC. However, in many cases the logon dialogue will ask you for a password that belongs to the user "laptop-machine-name\Guest" and will not permit you to specify another user. This is a sensible default setting provided my Microsoft (since it's the most secure), but in many cases the Guest account is disabled or you require network file access for specific users for another reason. This is what you need to do to your target machine (your laptop) to allow logging on as any user configured on that machine:

1. Go to your laptop and log on as a user with administrator rights.
2. Start the Local Security Settings Console.
   To do that click on the start button in your task bar and click run. Then type:
   "c:\windows\system32\secpol.msc"
3. In the console that appears, on the left hand side tree select:
   Security Settings > Local Policies > Security Options
4. In the main window find the option
   "Network access: Sharing and security model for local accounts"
5. Double-click on the setting to change it. Ensure that it is set to
   "Classic: Local users authenticate as themselves"
   and confirm by clicking OK.

6. If the user that you want to use for logging on through the network has an empty password, change it immediately. Empty passwords are a big security risk and generally a very bad idea! If you have a very good reason for having an empty password for a user, make sure that the policy setting
   "Accounts: Limit local account use of blank passwords to console logon only"
   that is located on the same list of policies is set to "Disabled".

You are done. Go back to your desktop, cancel any previous attempt to connect to the laptop that may still be in progress, open a new file explorer window and connect again by typing "\\192.168.1.100\c$" into the address bar. On the prompt that follows you will be able to provide any username/password combination that is set up on the machine onto which you are logging on.