Why do I get an error "CANNOT GENERATE SSPI CONTEXT"?

A. This is an issue with a SQL 7.x client not being able to check the NT credentials in use. It always calls the SSPI interface to check this. 

Make sure that if you're running a Win9x client that Microsoft Client Network is installed. Without this checking the NT credentials may not be possible.

If you're running NT workstation then check that the netlogon service is started.