Getting 0x8007052f Error logging on during credentials test

I am trying to install the service, but in the credentials dialog, when testing the credentials, I get a error dialog that says:

0x8007052f - Error login on
MYMACHINE/myusername: Account restrictions are
preventing this user from signing in. For example: ...

I presume that this is due to my username not having a password, so I left the password field blank.