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"Not all privileges or groups referenced are assigned to the caller." when connecting to Windows 7 Telnet

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http://serverfault.com – I'm trying to configure telnet server in windows 7. When I try make a telnet connection from another machine within the LAN, and I log in with the username and password of a administrator account, I get a "Not all privileges or groups referenced are assigned to the caller." error. I'm sure I missed out something but I'm not sure where it is! (HowTos)