client ntlmv2 auth = yesNTLM v1 has finally been disabled [by default] in Win7 and Server 2008, which breaks Samba client. DO NOT change the authentication method on the server as many other posts on the Internet suggest, as you'll simply be weakening the security of your network. Other posts suggest uninstalling Windows Live Assistant solves the problem - it doesn't.
If you're a pentester using Windows 7 as a testing platform however, you may wish to explore some of the client security options when testing legacy systems. The screenshot below shows the setting you need to change (Start->Run->secpol.msc->Local Policy->Security Options->Network Options: Lan Manager authentication level), though be aware of the security consequences of changing this setting; you could be sending weak password hashes across the wire!