Ok here is an odd one, last week i had a problem with a laptop that would not allow the user to log into moodle using IE. The error stated that cookies were not enabled so i enabled cookies and it didnt work. Then i went to advance options and switched on the 'Overide Automatic Cookie Handling', accepting both first and third party cookies, and turned on 'Always Allow session cookies'. I also set the site to a trusted site, and its still didnt work. I decided to test if cookies were enabled and test a few site... worked.. tested other moodle sites.. didnt work...
Long and short of it is that it now works in a fashion but not sure why. What i did was to update IE, turned off popup blocker and joined the laptop to the domain. Now it still didnt work with the test account on demo.moodle.com (just kept refeshing the page to login page) but it works for the user that had the problem. Anyone have any ideas what going on?