When you right-click My Computer icon, choose Properties and click the Remote tab, the option "Allow users to remotely connect to this computer" may be dimmed or greyed out. This happens due to a Policy setting. For stand-alone XP Professional systems, follow these steps to resolve the problem:
Click Start, Run. Type GPEDIT.MSC and press Enter. Navigate to:
Computer configuration | Administrative Templates | Windows Components | Terminal Services
In the right-pane, double-click Allow users to connect remotely using Terminal Services
Set it to Not configured
An excerpt from the GPEDIT.MSC help
Specifies whether to allow users to connect remotely using Terminal Services.
You can use this setting to configure Terminal Services remote access for the target computers.
If the status is set to Enabled, users can connect to the target computers remotely using Terminal Services. You can limit the number of users who can connect simultaneously by configuring the "Limit number of connections" setting or the "Maximum Connections" option on the Network Adapter tab in the Terminal Services Configuration tool.
If the status is set to Disabled, the target computers maintain current connections, but will not accept any new incoming connections.
If the status is set to Not Configured, Terminal Services uses the "Allow users to connect remotely to your computer" option on the target computer to determine whether remote connection is allowed. This option is found on the Remote tab in System Properties.
Note that Remote Desktop is based on Terminal Services
Equivalent REG value for this Policy setting
[HKLM\Software\Policies\Microsoft\Windows NT\Terminal Services]
Value named fDenyTSConnections
Value data for fDenyTSConnections
|0||Allow users to connect remotely using Terminal Services / Remote Desktop|
|1||Disallow users to connect remotely using Terminal Services / Remote Desktop|