From Mexico.purplecow.org
So, you can't access C$ on Windows 7 with smbclient? And this breaks your backup software? Yeah.
Step 1. Uninstall "Windows Live Essentials". Yes, it probably came in with an IE update or a service pack. It's worthless anyway. Remove. It somehow manages to break authentication, which tells me it is trying to do something very crap.
Step 2. regedit time.
- HKEY_LOCAL_MACHINE\SOFTWARE\Microsoft\Windows\CurrentVersion\Policies\System
- DWORD: LocalAccountTokenFilterPolicy
- Value: 1