Hi Mike,
I followed the workaround mentioned on this link: http://support.microsoft.com/kb/896861 "You receive error 401.1 when you browse a Web site that uses Integrated Authentication and is hosted on IIS 5.1 or IIS 6" and it solved half of the problem with IE. I am not getting this error anymore and windows authentication is working with IE (even manual is working). These are the steps I followed (from the above mentioned link):
Method 1: Disable the loopback check
Follow these steps:
1. Click Start, click Run, type regedit, and then click OK.
2. In Registry Editor, locate and then click the following registry key:
HKEY_LOCAL_MACHINE\SYSTEM\CurrentControlSet\Control\Lsa
3. Right-click Lsa, point to New, and then click DWORD Value.
4. Type DisableLoopbackCheck, and then press ENTER.
5. Right-click DisableLoopbackCheck, and then click Modify.
6. In the Value data box, type 1, and then click OK.
7. Quit Registry Editor, and then restart your computer.
But IE is still prompting me for my username and password once everytime I open this URL "http://<my website>/DesktopModules/AuthenticationServices/ActiveDirectory/WindowsSignin.aspx". It's an IE specific message (as I have mentioned before), not a DNN prompt for credential.
My site is in trusted sites list and also "Automatically detect intranet network" is checked in Security -> Local Intranet -> Sites. I am trying to avoid this login prompt in IE. Can you please suggest any solution for this?