Windows 7 has made some changes to the way networking is done. In particular, in how it interacts with previous versions of Windows.
Trying to connect to shared folders on older systems, such as Windows 2000 servers or workstations will result in the systems asking for authentications repetedly without ever allowing connections to be made.
The solution is to add information to the Windows 7 registry to tell it how to connect.
WARNING: This procedure involves modifying the registry of your computer, which if not done properly can severly effect the computer's performance.
Click the Windows Icon (which replaced the old Start button) and in the search bar, type in REGEDIT.
When RegEdit opens, drill down to the following key: HKLM\SYSTEM\CurrentControlSet\Control\Lsa
Right click and create a new DWORD called LmCompatibilityLevel with a value of 1.
Restart the computer and there should be no issues connecting to remote shares.