I ran an update from DNN 6.x to 7.01 and ran into a Authentication Popup window when clicking the "Edit This Page" button or Modules... probably others.

Assuming it was a permission issue or something wrong with the upgrade. I deleted the website completely, the database (recreated a blank one) and copied a full new install from the zip to the web folder... went through the setup wizard... and ran into the same issue as described above.

Specifically I am getting the following in popup:

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Authentication Required

The server http://sitename:80 requires a username and password. The server says: DNNAPI.

Username:
Password:
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There is another posting indicating that the "Edit Button" isn't working (no indication of the popup error I get) that seems to disable this error by using an older version of the control panel so it isn't really a solution to the problem.

Going to "Host Settings", selecting "Other Settings" tab and changing the "Control Panel" setting from "Controlbar" to "Ribbonbar".

I have the same problem when I install DNN7.02. I even asked the hosting company support team build the site for me. I get the same error, I made a work around by changing the control pane to RIBBONBAR which allowed me to change the page Mode from View to Edit, this was not possible while the controlpanel was set to CONTROLBAR.

I have included my server settings if this can be use.]

1. This problem also shows when one tries to upload files using DNN a popup comes up requesting authentication. 
2. The Hosting company is eukHost and I have been using them for the past 5 years. I have most of my sites on another server still running DNN6 and I was considering upgrading to DNN7.
3. @Chris, I can send you the login details via email if you would like to login and recreate the errors.

I'm seeing the same issues on a fresh install of 7.02. I changed the control panel mode to RIBBONBAR, which allowed me to put a page in Edit mode. I am prompted for server credentials when trying to upload a new PNG for my site logo, however.