What seemed to happen was it was storing the old information in the Password list under the Manage Passwords section under "User Accounts". (Start > Settings > Control Panel > User Accounts)
If a user who had ever tried accessing an Area or document library in SharePoint where they didn’t have permission, they were getting prompted for their credentials, and the information was being stored in this list.
When the user changed their network password after 45 days, then went to log back on to SharePoint, it was still recognizing their old credentials from the cached password list, so when they typed their new password it wasn’t authenticating, because the passwords matched.
To resolve this issue:
1. Click "Start" > "Settings" > "Control Panel"
2. Double click "User Accounts"
3. Click on the "Advanced" tab
4. In the "Passwords and .NET Passports" area click "Manage Passwords"
5. Remove everything there.
Also, delete everything IN this directory:
C:\Documents and Settings\YOURUSERNAME\Application Data\Microsoft\Credentials
and everything IN this directory:
C:\Documents and Settings\YOURUSERNAME\Local Settings\Application Data\Microsoft\Credentials
Filed under: SharePoint