If you're using the ZEN 7 client ONLY, you need to follow the communities article:
Access Manager Single Sign-on to NetStorage | Novell User Communities
and set the cookieless option on NetStorage to be zero (0)
After you change NetStorage options you need to restart the server running NetStorage, or restart all the NetStorage processes themselves.
I have mine setup that way and I get SSO via the NetIdentity/ZEN 7 client via NAM 3.1.1
But because cookieless is set to 0, people without the ZEN agent get the pop-up.