I just joined (cause I was looking for an answer for something on MX record/DNS stuff), but I had a similar problem last night when I setup my test W2kServer + Exch5.5 server.
I solved my problem this way: Goto the IIS management console, see if you can locate the Exchange Website. Then goto the properties of that page. Goto the security tab, edit the Anonimous Access and Authentication Control(by default the security is set to Basic Authentication with password being send in clear text), change this to Inetgrated Windows Authentication. And the next time a normal user logs on with OWA, he/she has to enter the same credentials as if he/she logs on to a networked machine, I mean the server is requesting: Username, password and domain name.
This is true but they still have to have logon local rights under user manager to even be able to access OWA, if they don't they will get only get the logon screen and it won't let them logon.
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