Windows Credentials keeps popping up despite entering user info

Hello all.

We are experiencing an issue on our SharePoint site, although it's only one user right now as far as we know. When they click 'New Document' and choose one of the forms we have it will open in Microsoft Word 2010 but then it will ask for their user credentials. Their username will be there, but they must enter their password. We will do this and check the "Remember" box and even though the password entered is correct, the windows credentials window pops back up. We continue to enter the password and it continues to pop back up. If we cancel, we are unable to save the document back into SharePoint.

We have SharePoint 2010 and the site is part of the Local Intranet. Authentication is set to automatically logon only in Intranet (tried automatic with user and pass) and that did not get rid of the Windows Credentials window. This problem seems to be with Microsoft Word primarily, but unsure. When opening timecards on SharePoint with Excel 2010 it saves back to SharePoint just fine. However, as soon as I've opened a Word document Excel starts doing the same thing.

No matter how many times we enter the password, the window pops back up. This problem is a hindrance as our staff rely on SharePoint use heavily for their day to day activities in and out of the classroom. 

Any thoughts or suggestions on this?