Basic Authentication

I have a dotnet 4.5 webapp on iis 7 and windows 2008 web edition.

I am trying to setup basic auth for my website.

In my iis manager under authentication i disabled anonymous authentication and enabled basic authentication.

I created a windows user and everything works fine user and pass asked and auth ok.

But if i put my web.config inside my website dir i am not able to achieve the same result.

Thanks for the help