If you are getting errors when trying to configure SSO in MOSS 2007, something we discovered that solved this that is worth trying

  1. In Central Administration go to Operations·
  2. Under Secuirty Configuration, click on Service Accounts·
  3. Select “Windows service” option and then “Single Sign-on service” in the corresponding dropdown·
  4. Enter in the service account username and password·
  5. Click OK

Even though we had set this up through the “Services” console, doing this through the central administration screen fixed the problem.

Some of the errors we were getting was “Login failed for user: domain\user” in the event logs