[setch]

This type of error normally indicates a problem with either Terminal Server license server or the actual Terminal Server itself.

If I am guessing correctly the error that you are getting is

The remote computer disconnected the session because of an error in the licensing protocol. Please try connecting to the remote computer again or contact your server administrator

A. If you are using a licensing server, is it up and running?
You also need to check that the license server, terminal server and the client can communicate with each other.

B. Check the registry settings on the client (MS XP HOME)

1. HKLM\Software\Microsoft\MSLicensing
2. Click MSLicensing
3. From the Registry menu, click Export Registry File
4. When saving call mslicensingbackup (this can be restored by double clicking on the saved file)
5. Click the Edit menu, then click Delete. Click Yes to confirm the deletion of the MSLicensing subkey.
6. Close the registry editor and then restart your PC

The deleted key will be rebuilt.

Try the connection to the server again.

Good Luck, but remember that playing with the registry is bad for your health and I take no responsibility should anything go wrong.

Setch