I am trying to use System.Net.WebClient in a WinForms application to upload a file to an IIS6 server which has Windows Authentication as it only \'Authentication\' method.>
Without knowing your IIS deployment, and assuming that you have the correct authorization rules for upload set in IIS (e.g. the right allow* ACL's on the right dirs you are trying to upload content to, etc), first thing I would try is to set UseDefaultCredentials to true instead of explicitly set Credential. (Maybe you think you are accessing the server with the Credentials you are setting but that's not the case? That would be possible if this works.)
This is a very common scenario, so I would focus on IIS authorization rules for the directory in which you are trying to upload the file, the actual ACL's on that directory. For ex. is your site impersonating or not? if it is, then you have to have actual ACL's on that dir, otherwise whatever account app pool is running on.