Please consider the following Patterns & Practices on Web Service Security from Microsoft:
Brokered Authentication - http://msdn.microsoft.com/en-us/library/aa480560.aspx
The main topic is - Web Service Security
Scenarios, Patterns, and Implementation Guidance for Web Services Enhancements (WSE) 3.0
http://msdn.microsoft.com/en-us/library/aa480545.aspx
Ultimately theres lots of ways you could do it. I achieved a simple single sign on by building a url with a token from one website pointing to another domain. The encoded & encrypted token contained details to submit back to the previous domain. Upon receiving an incoming request on the second domain, an underlying web service checks that the incoming request's token is valid with the previous domain using a shared private secret, known to both domains.