Follow the instructions HERE.
If IBM changes their website, here is a copy of the solution:
Resolving the problem
This is specifically related to Windows 7. The following Windows 7 configuration changes need to be made.
In Administrative Tools select
Local Security policy > Security settings > Local policies > Security options
Select Network Security: LAN Manager Authentication level and change it to "Send LM & NTLM responses"
In Internet Explorer, Internet Options > Advanced, Enable Integrated authentication
(I don't know if this IE setting really applies or not.)
The Network security: Configure encryption types allowed for Kerberos under Security Options likely is set to "No minimum". This needs to have DES_CBC_CRC turned on at minimum for Kerberos authentication to work properly.
(I had to enable all encryption types to resolve the error.)
Related TechNet article