Error message when you try to log on to a Web site that requires Kerberos authentication by using IE7 on a Windows XP SP2 computer: "Access is denied due to invalid credentials
You try to log on to a Web site that requires Kerberos version 5 protocol authentication. However, you are prompted three times for your user credentials, even though you enter the correct information every time that you are prompted to do this. When you try to log on the Web site for the third time, you receive the following error message:
HTTP Error 401.1 - Unauthorized: Access is denied due to invalid credentials. Internet Information Services (IIS)
This problem occurs if the Web site uses a CNAME resource record in the Domain Name System (DNS) to contact the server that initiates Kerberos authentication. When you use Internet Explorer 7 to access the Web site, Internet Explorer 7 uses the host name of the server instead of the CNAME resource record to contact the server. However, only the Service Principal Name (SPN) for the CNAME resource record is registered on the account that the server uses for the authentication. Therefore, the authentication process does not work.
http://support.microsoft.com/default.aspx/kb/938305
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