One Note synch password prompt for SharePoint 2010: A password is required to synchronize this notebook. (Error code: 0x80070005)

When synching OneNote Files with SharePoint 2010 our users continually were getting Password prompts on starting OneNote. 

"A password is required to synchronize this notebook. (Error code: 0x80070005)"

After searching high and low I came across this thread on the MSDN forums:
http://social.msdn.microsoft.com/Forums/mr-IN/sharepointgeneralprevious/thread/0c2bf498-f669-4551-bf51-9113c64af26c?prof=required

Within that thread a MSFT support person suggests this KB article as a possible fix:
http://support.microsoft.com/kb/943280  The key point of this was the fact that in my environment we do not use a proxy server, so I am not sure how this will work with a Proxy, but it solved my issue.  The fix is already included in Win7, but you need to create the AuthServer list as follows:

1.       Click Start, type regedit in the Start Search box, and then press ENTER.

2.       Locate and then click the following registry subkey:

HKEY_LOCAL_MACHINE\SYSTEM\CurrentControlSet\Services\WebClient\Parameters

3.       On the Edit menu, point to New, and then click Multi-String Value.

4.       Type AuthForwardServerList, and then press ENTER.

5.       On the Edit menu, click Modify.

6.       In the Value data box, type the URL of the server that hosts the Web share, and then click OK.

Note You can also type a list of URLs in the Value data box. For more information, see the "Sample URL list" section in this article.

7.       Exit Registry Editor.

8.    Restart the WebClient Service in Admin Tools|Services|WebClient