30 Nov 07 HTTP Error 401.1 – Unauthorized: Access is denied due to invalid credentials

http://support.microsoft.com/kb/871179

WORKAROUND
To work around this behavior if you have multiple application pools that run under different domain user accounts, you must force IIS to use NTLM as your authentication mechanism if you want to use Integrated Windows authentication only. To do this, follow these steps on the server that is running IIS:

1. Start a command prompt.
2. Locate and then change to the directory that contains the Adsutil.vbs file. By default, this directory is C:\Inetpub\Adminscripts.
3. Type the following command, and then press ENTER:
   cscript adsutil.vbs set w3svc/NTAuthenticationProviders “NTLM”

Tags: iis