Some follow up on this.  First off I'll say I don't know *how* it was working with FireFox but not IE... seemed like a strange happening.

Anyway, this is where I went to solve it:

1. I have a staging server so I deployed my changes to the staging server (yeah, I actually had done a straight release from dev to production in this case as it was only a very minor change... I should have gone to staging first).  Everything worked just peachy on the staging server in both IE and FireFox.  Must be a server issue?
2. Started comparing server configurations and save having Frontpage Extensions enabled on the production server (dunno how that got there, so I turned it off) the configuration looked the same.  One thing triggered in my mind though -- this is an Intranet so both servers are set to use Integrated Windows Authentication and Anonymous Authentication is disabled.  What if, for some weird reason, the AJAX request isn't authenticating?  Still doesn't explain why it worked on the staging server but it was a straw to grasp at.
3. I go back to the production server and find my service files (.asmx) in the appropriate module folder and through IIS manager I mark those files so they can be accessed Anonymously.  *voila!*, it works.  Just to be clear on this -- staging server is set up exactly the same with exception of marking those ASMX files as accessible anonymously.  WTF?

At this point I don't care why it works now I'm just happy it does.  If anybody has any ideas about it though I'd be more than glad to hear them.

I thought that might have been the case as well and tried forcing a browser refresh (CTRL+F5) but I didn't try manually clearing the cache.  On the other hand I did try this on another computer that had never connected to the tab containing the module and they could replicate the issue.  I'm just happy that using IIS to mark those service files as "Anonymous" worked and I'm not terribly concerned about not having the Windows authentication on it since I'm using an authentication scheme on my webservices similar to the one you (Michael) presented in IWeb and your "Secure AJAX Web Services" tutorials.