Removing LM Hash
Most versions of Windows can be configured to disable the creation and storage of valid LM hashes when the user changes their password. This is the default setting in Windows Vista, but was disabled by default in previous versions of Windows. Note: enabling this setting does not immediately clear the LM hash values from the SAM, but rather enables an additional check during password change operations that will instead store a "dummy" value in the location in the SAM database where the LM hash is otherwise stored. (This dummy value has no relationship to the user's password - it is the same value used for all user account
Read more about this topic: Security Accounts Manager