Yes, I saw that NZ Blog site.

I have tried it multiple ways in Vista SP2 and XP SP3 with Office 2003 and Office 2007. So far no success.
I am beginning to think there are "prerequisites" that have to be met in the OS first.

BTW: The server is SSL (https) and users authenticate to the Domain via a Smart Card. Those credentials are then passed to the SharePoint Server.