401.1 error when accessing SharePoint site from the SharePoint server

When you try to access a SharePoint site from the server and not form a remote computer you may get an HTTP 401.1 Unauthorized: Logon Failed error. When you open the same URL form a remote client it works fine.
This is often the case when developing on virtual machines or the local computer.

The reason is the loopback check security feature in Windows that is designed to help prevent reflection attacks. See: http://support.microsoft.com/kb/896861

In a dev environment it is probably safe to just disable this security feature with adding a registry entry:

1. Click Start, click Run, type regedit, and then click OK.
2. In Registry Editor, locate and then click the following registry key:
   HKEY_LOCAL_MACHINE\SYSTEM\CurrentControlSet\Control\Lsa
3. Right-click Lsa, point to New, and then click DWORD Value.
4. Type DisableLoopbackCheck, and then press ENTER.
5. Right-click DisableLoopbackCheck, and then click Modify.
6. In the Value data box, type 1, and then click OK.
7. Quit Registry Editor, and then restart your computer.