Authentication is triggered by using NT ACL's on the files in the Web tree. I'm guessing that if you use File Manager and look at security Permissions, that 'Everyone' has access to all files.
A browser starts a session with a HTTP server as anonymous - which IIS translates to a specific user, IUSR_MACHINE. If this user doesn't have rights to a file, then the browser gets an access error from the server and pops up the username/password box. This username/password then are used as the credentials. Make sure the account exists, has the "Log on Local" user right (set with User Manager) and has privilege to the file you want to access (and that the anonymous account doesn't have
privilege).
