The original Microsoft support article is here: http://support.microsoft.com/kb/896861

Cause:

This issue occurs if you install Microsoft Windows XP Service Pack 2 (SP2) or Microsoft Windows Server 2003 Service Pack 1 (SP1). Windows XP SP2 and Windows Server 2003 SP1 include a loopback check security feature that is designed to help prevent reflection attacks on your computer. Therefore, authentication fails if the FQDN or the custom host header that you use does not match the local computer name.

Fix:

To set the DisableLoopbackCheck registry key yourself, follow these steps:

1. Set the DisableStrictNameChecking registry entry to 1. For more information about how to do this, click the following article number to view the article in the Microsoft Knowledge Base:
   281308  (http://support.microsoft.com/kb/281308/ ) Connecting to SMB share on a Windows 2000-based computer or a Windows Server 2003-based computer may not work with an alias name
2. Click Start, click Run, type regedit, and then click OK.
3. In Registry Editor, locate and then click the following registry key:
   HKEY_LOCAL_MACHINE\SYSTEM\CurrentControlSet\Control\Lsa
4. Right-click Lsa, point to New, and then click DWORD Value.
5. Type DisableLoopbackCheck, and then press ENTER.
6. Right-click DisableLoopbackCheck, and then click Modify.
7. In the Value data box, type 1, and then click OK.

This examble is using a table variable.

DECLARE  @People TABLE (
    ContactID INT,
    FirstName NVARCHAR(50),
    LastName NVARCHAR(50)
)

INSERT @People (ContactID, FirstName, LastName)
EXEC dbo.GetPeopleByLastName @LastName = 'Alexander'