So I\'ve created a new ASP.NET MVC project using the intranet template. web.config contains the appropriate values (e.g.
You should check to see if you have Windows Authentication installed/enabled. That may sound weird but in IIS 7 you have to install and enable the various authentication methods. Check out http://support.microsoft.com/kb/942043/ for more info, see quoted section below.
Cause 1
The Web application is configured to use Integrated Windows authentication. However, the Windows Authentication feature is not turned on. Or, the Integrated Windows authentication native module section of the ApplicationHost.config file or of the Web.config file is not valid. To resolve this problem, see Resolution 1.
Original
Usually when you try to view an asp.net web page hosted on IIS and receive a login prompt it doesn't mean your credentials weren't received or that you aren't authenticated. What it means is that the account that your website is running under doesn't have the right permissions to work with the files.
In IIS 6 and 7 you can easily change the user account that your app pool runs under. Try changing the app pool identity to an account with more access specifically designed for this. Or if you want to stick with the existing account (IUSR_? Network Service?) you can grant that account more permissions on the directory where your website is stored.
This article is specifically targeted at BizTalk but has almost no references to it and focuses on troubleshooting permissions issues with IIS and app pools: http://msdn.microsoft.com/en-us/library/aa954062.aspx