For the past year I have been developing on VPC images running Server 2003, so finally I decided to "cowboy up" and start using my Vista machine. I really dig some of the new features in IIS 7, like being able to edit web.config connection strings for sites, however I was having trouble debugging my web application. I kept getting "An authentication error occurred while communicating with the web server". That is when I came across
Scott Gu's blog which talked about the KB article
here. Hope this saves somone some time!