I just had a similar issue last week. It is an authentication issue with Vista, at least mine was. I can't locate the bug report that gave the fix but this is what I did from my notes.
run secpol.msc (from a command line) on the Vista machine
Navigate: Local Policies, Security Options, Network Security, LAN Manager Authentication Level. Change it from "Send NTLM2 response only" to Send LM & NTLMV2 -use NTLMV2 if supported.
Then try to authenticate again. It worked for me. From the bug report it seems that Vista defaults to the newest security negotiation protocol and SME still uses the older one. If I can find the bug report I'll post it back here.