Thanks again. With your help I have now set read permissions for IUSR_mycomputer on the C:\inetpub\wwwroot folder. I still get the uname and psword request box for http://localhost. A few more items that might help. This is a clean install of xp pro so I'm sure that there are no bugs (using McAfree...

Is there a way to have IIS7 do different authentication on virtual applications based on rules like: * This request comes from this range of IP, so we do Windows Authentication here * This request comes from another range of IP so we use Anonymous Authentication here Filtering above could be based on...