SCCM Remote Tools Not Working Properly

Hi All,
I have just upgraded my SMS 2K3 server to SCCM 2007 SP2 site. I also upgraded the clients  (Windows XP SP3) to SCCM. The clients are installed with Remote Tools enabled (Full Control).  The problem is that when I try to control the XP desktop I receive the following message in my Remote Control window:
"The remote computer is either locked, or there is no user currently logged on. Configuration Manager remote control requires an interactive user to be logged on to the computer and for the session to be unlocked. Use Remote Desktop Connection client to control this computer, or click Cancel to terminate the connection."
At the time of this message, the rest of the Remote Control window is black with a big "pause" (as in 2 vertical lines) icon appears in the top left corner and on the XP client (which I am logged in on) shows the prompt on whether I want to accept the remote control request or not.  When I say yes, nothing changes on the server side Remote Control window.
The wierd thing is that the machine is NOT really locked, or logged out and its user is logged in locally to the XP machine and sitting at the desktop. Also there is no FW preventing the connection.
 
Thanks. 

Do you scavenge DNS often?  Could it be you're really connecting to a different PC?  Ping the machine, then use nbtstat -A to see if you're really connecting to who you think you are.

I have checked the connection and DNS, everything is OK and I am connecting to the real machine.

had a similar issue, check the size of the HKLM\software\Microsoft\ole\machinelaunchrestriction key
Report back with details

I have already solved the problem. Actually SCCM remote tools rely on Windows "Terminal Services" service which was disabled for our environment according to GPO settings. I just started the mentioned service and then it worked :-)

r