HTTP 401.2 - Unauthorized: Logon failed!!!

Greetings,

I have been trying to access a friend's exchange web access (http://xyz.com/exchange) which works fine with few Windows XP computers via IE-sp6 (When I said works fine, I meant it pops up a login dialog for username & password).

But when I access the above exchange site with certain other workstations of equal spec : WinXP-SP1, IE-sp6 I no longer get the login dialog and I only get the following error message

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HTTP Error 401
401.2 Unauthorized: Logon Failed due to server configuration

This error indicates that the credentials passed to the server do not match the credentials required to log on to the server. This is usually caused by not sending the proper WWW-Authenticate header field.

Please contact the Web server's administrator to verify that you have permission to access to requested resource.
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I really sense some NTLM issue, like username/password not being sent or sent incorrectly. And the only solution I came up with so far was installing another browser (Firefox). Appreciate any suggestions or advice.

TIA,
Shafeeq.