Authentication Question

[timmmahh]

I have a service and asp.net application that both attempt to
authenticate supplied user credentials to get access to my Active
Directory server.

At the time of the authentication:
1. The service is running under the local system account NT
AUTHORITY\SYSTEM.
2. The asp.net application is running under local machine ASPNET
account.
..ps (I worked this out by querying the
System.Security.Principal.WindowsIdentity.GetCurre nt().Name property)

When authenticating, if the user name is fully qualified (e.g
MyDomain\Administrator):
1. ASPNET application authenticates ok.
2. Server authenticates ok

If the user name is the unqualified (e.g Administrator):
1. ASPNET application authenticates ok.
2. Server fails to authenticate returning 'The authentication mechanism
is unknown'.

Both applications use the exact same mechanism for authenticating:

DirectoryEntry dirEntry = new DirectoryEntry ( ldapADSPath, Username,
Password,
AuthenticationTypes.Secure );
object obj = dirEntry.NativeObject;

I know I can work around this by setting the service logon account to a
network account rather than local system, but I really want the reason
why there is this difference between ASPNET and the local system
account as I understood neither had network access?