In IIS go to the properties of the site.
Select the "Directory Security" Tab.
Click the edit button in the "Authentication and access control" area.
Check off "Enable anonymous access". You should not need to change the username and password.
I checked OFF the box that says Anonymous Access when I click the button "Edit" under Directory Security, then in the box that says Anonymous Access and Authincation control. Is that the one you mean? Because it still asks for a password.
In XP, IIS version is 6.Your site is secured by windows authentication. To turn off this Go to Internet information service (located in start->programs->administrative tools)
Select server and then select your site. Right click, Go to properties and go to Directory security tab Click edit in Anonymous access ->Enable the Anonymous access and disable the integrated windows authentication->ok->ok.