Need help configuring IIS to serve 2.0 web services

I am attempting to deploy .NET 2.0 web services on IIS that has both 1.0 and 2.0 installed. This web server primarily serves a large .NET 1.0 application.

I have copied by .NET 2.0 web service project to the server and have created a virtual directory to point to the necessary folder.

When I set the ASP.NET version to 2.0 in IIS, The application prompts me for a username and password (when I attempt to open the site in the browser), If I set it back to 1.0, then I am not prompted for a password, but obviously get a full application error.

I have anonymous access enabled (with a username / password) and have authenticated access checked as "Integrated Windows Authentication)

How can I configure IIS so that I am not prompted for a password while having ASP.NET version set to 2.0?

Thanks...

EDIT I had major connection problems and apparently created some duplicate posts...I'll delete the ones with no answers.

From stackoverflow mmattax

• You will at least need to run each web service in it's own application pool. You can't mix the framework versions of .net within the same pool.

  From Dave Anderson

• You should configure a separate web site and application pool for your .NET 2.0 app.

  From Terrapin

• Just to clarify on Dave's answer, you really only need 2 application pools, one for .NET 1.1 and one for 2.0, you can group all the applications running the relative frameworks to use the appropriate app pool. This is to say you don't need a new application pool for each Site/Service in IIS.

  From Quintin Robinson