IIS6, Integrated Windows Authentication and IE7 - Prompting for UN/Pass on intranet

I have a IIS6 server that is located in our intranet. This server host an internal application. The site has been set for "integrated windows authentication" and "enable anonymous access" has been unchecked. Some users are not being prompted for authentication and some are. the ones who are being prompted look as if they are trying to log into the local machine and not using their AD creds.

the url for the app resembles http://apps.somedomain.com. from reading the support documentation MS states that any address with "." in it is considered intERnet and will not pass creds over. i have added the site to the trusted zone and local intranet zone to no avail.

any ideas and help would be greatly appreciated.

thanks
ronayersAsked:
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Kruger_monkeyCommented:
Are you using a proxy server of any kind?  If you are, add that address to the exclusion list. I've seen a similar thing where by it appeared the requests were originating locally, but they were in fact the proxy server passing the request on so it appeared local.
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ronayersAuthor Commented:
Well, we do use a web filter but i am not sure how its handled (as far as proxy goes.) let me do some digging. thanks.
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