Yes if you use one of the Vista home editions there's no such thing as "local security policy."
The only fix I Know of are to disable NTLM v.2 through the registry.

The steps are:

1. Click start
2. Type: regedit
3. Press enter
4. In the left, expand these folders: HKEY_LOCAL_MACHINE\SYSTEM\CurrentControlSet\Contro l\
5. In the left, click on the folder named: Lsa
6. In the right, double-click "LmCompatibilityLevel"
7. Type the number 1 and press enter
8. Restart your computer