WebDav Authentication

I'm running Apache 2 on Debian Sarge. I've got a directory that
require authentication to access it. This works fine with IE when I
access it. But when I try to access it as a web folder, webdav, I get
an error. It seems that IE is prefixing the user name with the web
server host name, and the authencation can't find it in the password
file. The log files seem to confirm this.

I've got the exact same Apache <directory> settings in another server
running Apache 2 on Redhat 8, and I don't have any problems. It seems
to me that Apache is telling IE what its host name is, and that's
confusing IE. Does anyone have any ideas how I might fix this?

Dan