Product:
Cognos Controller 8.5.1
Windows 2008 R2 Server

Symptom:
Change to Cognos 8 authentication in Cognos 8 Controller configuration, from Native authentication does not change it for the users.

Problem:
Controller users still get login dialog to enter username and password

Solution:
On the Windows 2008 server you must start Controller Configuration program by right click and select RUN AS ADMINISTRATOR to allow the changes to be saved.

You do not get a error, but the switch to Cognos 8 is not registered by Windows. Most changes are in newer Windows version not stored correct if you not run the Configuration program as a administrator.

Start Controller Configuration program with Run as Administrator, and change selected authentications method to Cognos 8
Click save.

Let the user try again.