If you have an ASP.NET app hosted by IIS7 on any Vista Home edition (though I’ve only used Home Premium), it fails because Vista Home Premium lacks Windows Authentication. Fortunately, Microsoft is aware of this and has issued a fix. Unfortunately, it’s not part of Windows Updates so you’ll have to go get it yourself.
You can find KB937523 here describing the situation: http://support.microsoft.com/default.aspx?scid=kb;EN-US;937523
The fix can be found here: http://connect.microsoft.com/VisualStudio/Downloads/DownloadDetails.aspx?DownloadID=7250