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RDP to Windows XP Fails, RDPDD.dll Failed to Load

You may not be able to connect to a Windows XP computer using RDP. I've seen this a lot and always thought it was related to an NVIDIA driver. Updating the video card driver usually fixes the problem, but I've found an easier way.

To confirm that you're having the same issue, check the event log for the following:

Event Type:    Information
Event Source: Application Popup
Event Category: None
Event ID: 26
Description:
Application popup: : \SystemRoot\System32\RDPDD.dll failed to load

You can fix this bug by increasing the size of the session image space by adding the following registry key:

Windows Registry Editor Version 5.00

[HKEY_LOCAL_MACHINE\SYSTEM\CurrentControlSet\Control\Session Manager\Memory Management]
"SessionImageSize"=dword:00000020

Source: http://forums.nvidia.com/index.php?showtopic=67147&hl=remote%20desktop&st=68

Note that apparently this can affect drivers by other vendors, but I have only ever seen it with NVIDIA.