Actually, that's the funny thing.  It is opposite.  You're right, most people don't have IIS set to not allow "Anonymous" and that when they do they are typically using IE however in this case IE6/IE7 were the only browsers that didn't work whereas FireFox did.  More than likely it is a combination of issues and/or server differences because, as I'll note, my staging server is also set up to not allow "Anonymous" access and it works just fine on that server.  However, our live server doesn't let it work with IE6/7 unless I set those few files to allow "Anonymous".  I was grasping at straws at that point and just decided to try it.

I know that isn't the real solution to fix it but since I spent days (literally spent 3 days almost solid) trying to fix it I'm just glad I cobbled together something that works for now.  I have no idea what the difference is between the configuration on the two servers, that is, why it works on the staging server but not the live server.  It just doesn't make sense.

As a note, we don't use FireFox as a general rule of thumb where I work because the IT guys have set up a "standard".  Most people can't install anything on their computer at all so they all have IE6 (yeah, dunno about that one... don't know why IT won't upgrade them all to at least IE7... maybe they'll do it when IE8 is released).  As an IS/IT employee I have a bit more freedom so I have all the "major" browsers installed on my machine and then I have a few virtual machines that I can load up with other browsers/configuration.