Ok got this working. So if anyone is trying to get this going in 4.5.1 Farm mode it does work. Some items to consider if you run into trouble:
1. Changing the authentication mode to Windows will always break, it needs to be in Form authentication always. So
<identity impersonate="true" userName="domain\xxxx" password="xxxxx" />
<authentication mode="Forms">
<forms name=".DOTNETNUKE" protection="All" timeout="60" cookieless="UseCookies" />
</authentication>
People everywhere had been saying this, I just got desperate because I could not get it going in Forms auth mode.
2. If you think you have it configured but the app just wont log you in automatically, it is usually 1 of the following things:
-if you logged into DNN first with your domain credentials, ensure that the user is created properely. In my case, the first time I set up the authentication tab I entered the domain in lowercase. This caused the user to be created and then work when I logged in manually, but then when I updated the domain in capitals like it should be in auth tab, the config was right, but autologin would not work until I deleted the original domain user with the lowercase domain config. So this jacked up all my testing because my test user was the one with lowercase settings. I only figured it out when I had other users log in, and noticed when the account was autocreated, it was in uppercase.
-Ensure that you clear the cache and restart the DNN app in Host settings. Caching seems to play a role in all this if the config was set up improperely at first, like in my situation
Now it works like a champ.
Mike