I had the same problem. But instead of on a shared host, I had the problem on my own Windows 2003 Server.
First, I tried to install to a subfolder (localhost/dotnetnuke); created the virtual dir. in IIS6; applied the permissions as directed in the installation guide; setup a new DB (MS SQL2000); updated web.config with the necessary settings.

Same security problem!

I changed the application pools, nothing changed.

The solution:
I created a new website with a port number different than 80. It works (almost!)

Unfortunately, DNN cannot register the port number and tries to go to the root of the application"/" instead of ":1234/"

Hopefully, this trick would help you. I know it's not a real solution, just a workaround. Now I have to find a solution for the port problem. Any idea?

Cheers,

So does anyone have a REAL solution?  My hoster (CrystalTech) claims to have done nothing to fix my problem, but magically it was fixed or 2 weeks.  Now the problem is back and it's looking for revenge.  It's kicking my butt.

Does anybody know what to say to the hoster to have them fix the problem?

 

I also am trying to get an install going on 1and1 for a friend.  And I also get the exact same error.  I've set the impersonate to true since 1and1 wont le you have access to the ASP.NET account to run sites with.  The site installs under a sub folder with no issues, but once I go to the site it starts running but has errors in various places.  Sometimes things work, someimes they don't.  It's really bizare.  1and1 of course says they do not support DNN on their shared hosted platforms...  Wish we knew that before we went with them.

 

I've tried installing it on another machine and then moving it there but I get a bunch of other issues when I do that.  This is just so frustrating.