After installing Windows 7 my ASP.NET application displayed an Access is deniederror. The complete error message was:

Error message 401.2.: Unauthorized: Logon failed due to server configuration.  Verify that you have permission to view this directory or page based on the credentials you supplied and the authentication methods enabled on the Web server.  Contact the Web server’s administrator for additional assistance.

My application makes use of Windows Authentication and impersonation. For this IIS needs to support Digest Authentication. In the default IIS7 installation neither Windows Authentication not Digest Authentication is installed.

To turn those features on, go to Control Panel -> Programs -> Turn Windows features on or off -> Internet Information Services ->World Wide Web Services -> Security.

Now check the authentication methods needed. Now restart both IIS and the IIS Management Console. After re-opening the IIS7 management console, navigate to your site, open Authentication and enable the authentication methods here also.

You should now be able to login to your ASP.NET application using your Windows account.