I am running SharePoint Server 2007 with SP1 on our test server. It's a single-server installation. It has a single SharePoint application running on port 80. It's using Windows authentication. It's using both Windows (with NTLM) and basic authentication for IIS auth settings. There is one site collection running on this application.
Ordinarily, we log in with our Windows domain accounts to interact with the system, but we have a couple local machine user accounts that we created in order to test some things and run little utility scripts. The problem is that now we can't log into this site with those local machine users unless we're running the browser on the server itself. On the server, I can log in with those users. From any other box, I am rejected with a 401.1 error. With domain-based accounts, I can successfully log in from any of these machines. I am certain that this used to work, but because other people have unfettered access to the server, I can't promise that no settings have changed since then.
What could be happening? Is this a SharePoint problem or an IIS problem? And how can I re-enable login access to these local machine users?
I don't see how this is necessarily related to the impersonation settings suggested by TheCleaner. Our production server uses the same type of local machine users, and there is no problem logging into that SharePoint site with those local machine users (same IIS configuration and same web.config as is used in the problematic test server). Also, the articles suggested by TheCleaner are intended for audiences who are trying to access other resources as a specific identity after that identity is already logged into SharePoint. I can't even get logged into SharePoint. Am I just confused?