I had a problem with a Windows XP PRO Remote Desktop host.  No one could connect to the machine either locally or remotely.  There was no error on the client - it would try to connect and then just go back to blank or return to the connect screen.

On the host, I found an error that RDPDD.dll failed to load in the event logs.

The problem seems to be with the video driver.

This registry key that increases the size of the session image space solved the problem for me: