Amer,
I currently have SSO working in a 7.4 SPS7 system. I tested the url for the webgui with the address of /sap/bc/gui/sap/its/webgui?sap-client=000 and it worked
All I did in addition for the spnego configuration was set the 2 parameters
spnego/enable = 1
spnego/krbspnego_lib= $(DIR_INSTANCE)/SLL/libsapcrypto.so
and execute transaction spnego to create the keytab file.
I have also found that if there are 2 users in the same ABAP client that have the same SNC Name, then single sign on will not work and you will get the logon screen.
John Heintzberger