Solution: Check Microsoft article http://support.microsoft.com/kb/823731 which summary is:
To remove your cached user credentials that are used for PEAP authentication, delete the HKEY_CURRENT_USER\Software\Microsoft\dot3svc\Interfaces\{InterfaceGUID}\UserData\Profiles\ registry key. To do this, follow these steps:
- Click Start, and then click Run.
- In the Open box, type regedit, and then click OK.
- Locate, and then click the following registry key:HKEY_CURRENT_USER\Software\Microsoft\dot3svc\Interfaces\{InterfaceGUID}\UserData\Profiles\
- On the Edit menu, click Delete.
- Click Yes when you are prompted to confirm the deletion.
- Exit Registry Editor.
- Reboot the machine (this step is mine)