Softtokens are your credentials encrypted with a certificate hosted on your smart card. For the logon then the Smartcard, the Smartcard PIN and the Softtoken is required! So actually it is a 3-factor authentication and it does not require any domain controller!
To create a Softtoken insert first your smartcard in the cardreader. Then make sure that all card certificates are registered in your system.
Now you can start the tool Credential Manager (SetCredentials.exe) from your start menu.
The usage is quite easy. Just mark the certificate you want to use to create your encrypted softtoken. Then enter Username, Domain and Password and press Save. To validate the saved and encrypted credentials just press directly validate.
With the filter on the right you can filter our some certificates from a list of many certificates.