401 Error

[solex]

I am having some security issues with my web service

The service uses the default credential cache to make a webDAV request to
exchange to create an appointment. Using the browser the web services
appears to work perfectly. Directly referencing the web service (as a DLL)
from a test project also works perfectly. When I try to reference the
service (as a web service) from .NET or Access 2003 I get the follwing
error:

"System.Net.WebException: The remote server returned an error: (401)
Unauthorized.
at System.Net.HttpWebRequest.CheckFinalStatus()
at System.Net.HttpWebRequest.EndGetResponse(IAsyncRes ult asyncResult)
at System.Net.HttpWebRequest.GetResponse()
at ExchangeTools.WebDav.ProcessRequest(String URI, String RequestType,
String data, EncodingType et) in
\\vm-inetdev1\wwwroot$\ExchangeTools\WebDav.vb:line 70
at ExchangeTools.CalendarEvent.CreateNew(String FolderURI, String Subject,
String Description, String Location, DateTime StartDate, DateTime EndDate,
String EventAttendees, Boolean AllDayEvent, Boolean Confirmed, String
FreeBusy) in \\vm-inetdev1\wwwroot$\ExchangeTools\CalendarEvent.asmx .vb:line
95"

I have made the following changes in the web config:
<authentication mode="Windows" /> <identity impersonate="true" />

The web server service is running under a local administrator account.

Not sure where the problem lies but would appreciate some insight.

Also am I correct in assuming that if the server/web service is setup to use
integrated windows authentication only coupled with the use of the default
credential cache in the web service that the WEBDAV request is being
submitted under the user making the request?

Thanks,
Dan