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Our application group is looking to deploy a product which requires that we disable forceguest in HKEY_LOCAL_MACHINE\SYSTEM\CurrentControlSet\Control\Lsa. We are running on a Novell network (I know, I know) and the machines (mostly XP/some 7) are not on a domain. Each machine has two administrative accounts which are password protected, as well as the individual user's account (also an admin) and a general limited account, guest accounts are disabled.

What, if any, are the security risks of disabling forceguest in this environment?

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I believe this answers your question:

Windows XP mitigates several security vulnerabilities by preventing users who do not have a valid logon credential from accessing the system remotely. An example of this is the vulnerability that is addressed in Microsoft Security Bulletin MS05-039. However, when you enable Simple File Sharing, the Guest account is also enabled and given permission to access the system through the network. Because the Guest account is a valid account when it is enabled, and is given permission to access the system through the network, an attacker could use the Guest account as if they had a valid user account.

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