I have deployed a web site to a Win 2008 Web server with IIS7. The site works fine on a Win 2003 Standard server with IIS6. On the 2008 box, whenever I request a page (htm or aspx) from a folder named Reports, I get challenged with the Windows Authentication dialog box.
I have Anonymous Authentication and Forms Authentication enabled on the site. I applied Full Control permissions to the root of the site for both NETWORK SERVICE and IIS_IUSRS, but that hasn't make a difference.