If you get the SERVER APPLICATION UNAVAILABLE in big bold red letters it could be a .NET version issue, you might want to make sure that the version of .NET is ASP.NET 2.0 for the boned sites. As for the password popup, are you trying to access folders outside of the web site or have you set up a virtual folder that points outside of the IIS folders. If so you will need to give the proper permissions to the account that is setup to run each we site the permissions to access those resources.
- William
Give my enhanced version of the PWSK a look.
www.willyd.ca