It turned out that the solution shown above work only for Vista Business, Enterprise and Ultimate editions.
I tried a solution provided in Tech[dot]Blog for Vista Home edition and it worked. Here's what it says:
1) Goto Start—>Run—> and type regedit
Select Continue on the User Account Control prompt.
2) Navigate to HKEY_LOCAL_MACHINE\SYSTEM\CurrentControlSet\Contro l\Lsa
Create the following DWORD value (if it doesn’t exist):
Tutorial can be found here:-
Workgroup Password