The Password protect the screen saver group policy sets the ScreenSaverIsSecure Value Name at HKEY_CURRENT_USER\Software\Policies\Microsoft\Windows\Control Panel\Desktop to 1 for on, and 0 for off.

In Windows XP, prior to SP1, the ScreenSaverIsSecure Value Name at that location is a REG_DWORD data type. After SP1, the data type has been changed to a string, REG_SZ, to be consistent with all other Windows NT-based operating systems.

To resolve this problem, apply SP1, or manually set the ScreenSaverIsSecure Value Name, a REG_SZ data type, at HKEY_CURRENT_USER\Control Panel\Desktop.