If you are trying to connect to a remote server and get the "The remote computer requires Network Level Authentication" error then you most likely have the wrong version of the Remote Desktop Client.
To check to see if you have the right client right click on the top bar of the Remote Desktop client window and select "About"
Ensure that "Network Level Authentication" is supported.
XP Service Pack 3
XP Workstations which are not up to service pack 3 will also need to be upgraded before you can install the correct version of the terminal server client (version 7). This is the link to upgrade XP to Service Pack 3
If you need to upgrade multiple machines to XP service pack 3 then you may wish to download the "Windows XP Service Pack 3 Network Installation Package for IT Professionals and Developers"
Windows Machines - Remote Desktop Connection 7.0 client
For Cloud servers based on the Windows 2012 Server operating system, the Terminal Server client must be able to support "Network Level Authentication". The client that comes with Windows 7 or greater should be fine. XP-SP3 and Vista machines will most likely need to be upgraded. The "Remote Desktop Connection 7.0 client update for Remote Desktop Services (RDS) for Windows XP SP3, Windows Vista SP1, and Windows Vista SP2" can be downloaded via the following link:
or (directly from Windows Update)
(Note: It is also attached to the bottom of this article)
Mac Computers Remote Desktop Client
Microsoft Remote Desktop Connection Client for Mac 2.1.1
If after you complete the above you find that XP still does not support NLA you will need to do the following:
To enable NLA in XP machines; first install XP SP3, then edit the registry settings on the XP client machine to allow NLA
• Configure Network Level Authentication
1. Click Start, click Run, type regedit, and then press ENTER.
2. In the navigation pane, locate and then click the following registry subkey: HKEY_LOCAL_MACHINE\SYSTEM\CurrentControlSet\Control\Lsa
3. In the details pane, right-click Security Packages, and then click Modify.
4. In the Value data box, type tspkg. Leave any data that is specific to other SSPs, and then click OK.
5. In the navigation pane, locate and then click the following registry subkey: HKEY_LOCAL_MACHINE\SYSTEM\CurrentControlSet\Control\SecurityProviders
6. In the details pane, right-click SecurityProviders, and then click Modify.
7. In the Value data box, type credssp.dll. Leave any data that is specific to other SSPs, and then click OK.
8. Exit Registry Editor.
9. Restart the computer.
Now when you run remote desktop you will notice that Network Level Authentication is supported. To check this, right-click the top left hand corner of a remote desktop session and choose, Help > About