When launching an application on a machine that has the RSA Authentication Agent for Windows installed and using the option to Run as different user, the user is prompted for a passcode instead of the Active Directory password even if the user is not challenged.  Thus if the user does not have a passcode/token assigned and he tries to put the password instead, it gives the following error:

Authentication failed

If the need is to be prompted for a password instead of passcode, a registry key should be created.

1. From Start > Run, key in regedit and press Enter to open the registry editor.
2. Open or create the key HKEY_LOCAL_MACHINE\SOFTWARE\Policies\RSA\RSA Desktop\Local Authentication Settings.
3. Create a REG_SZ value named RDCFileName.
4. Click on it and choose Modify.
5. Set the Value data to  C:\Windows\explorer.exe.
6. Click OK when done.

7. Reboot the machine and test.
8. Run As now should prompt for password: