Please note: I have cross posted this from Newsgroup:
microsoft.public.dotnet.framework.aspnet.webservices
with a few minor changes...

I am having a simple problem setting up the security on my test web
service...

My Web service code is:

Imports System.Web.Services
<System.Web.Services.WebService(Namespace :=
"http://tempuri.org/AddNumbersWebService/AddNumbersWebService")> _
Public Class AddNumbersWebService
   Inherits System.Web.Services.WebService

   <WebMethod()> _
   Public Function AddNumbers( ByVal a1 As Integer, _
                               ByVal a2 As Integer) As String
      Dim lResult As String = (A1+A2).ToString
      Return lResult
   End Function
End Class

This works fine when I test it using F5...
It fires up a web page where I can test the web service.  
But when I try to write a win forms client program...

 Private Sub DoIt
   Try
     TextBox3.Text = "Processing"
     Application.DoEvents
     Dim lV1  As String  = TextBox1.Text
     Dim lV2  As String  = TextBox2.Text
     Dim lV1a As Integer = 0
     Dim lV2a As Integer = 0
     If IsNumeric( lV1 ) Then lV1a = Int( lV1 )
     If IsNumeric( lV2 ) Then lV2a = Int( lV2 )
     Dim lWebService As New
WebServiceClient.localhost.AddNumbersWebService
     Dim lResult     As String = lWebService.AddNumbers(lV1a,lV2a)
     TextBox3.Text = lResult
   Catch ex As Exception
     TextBox3.Text = ex.Message
   End Try
 End Sub

I get the error "The request failed with HTTP status 401: Access
Denied." from the line:
     Dim lResult     As String = lWebService.AddNumbers(lV1a,lV2a)

I think this is a simple setup problem with the IIS security settings
but I cannot figure it out. Any help would be appreciated.

The environment is:
Running on local host.
VB2003.
MS Windows-XP (SP1)
For the web service:
- anonymous access is allowed.
- Execute permissions = Scripts and executables
- Application protection = Low

Thanks in advance for your help
Greg

p.s. the reference.vb file contains...
Imports System
Imports System.ComponentModel
Imports System.Diagnostics
Imports System.Web.Services
Imports System.Web.Services.Protocols
Imports System.Xml.Serialization

'
'This source code was auto-generated by Microsoft.VSDesigner, Version
1.1.4322.573.
'
Namespace localhost1
   
   '<remarks/>
   <System.Diagnostics.DebuggerStepThroughAttribute(),  _
    System.ComponentModel.DesignerCategoryAttribute("code"),  _
    System.Web.Services.WebServiceBindingAttribute(Name:="AddNumbersWebServiceSoap",
[Namespace]:="http://tempuri.org/AddNumbersWebService/AddNumbersWebService")>
_
   Public Class AddNumbersWebService
       Inherits System.Web.Services.Protocols.SoapHttpClientProtocol
       
       '<remarks/>
       Public Sub New()
           MyBase.New
           Me.Url =
"http://localhost/AddNumbersWebService/AddNumbersWebService.asmx"
       End Sub
       
       '<remarks/>
       <System.Web.Services.Protocols.SoapDocumentMethodAttribute("http://tempuri.org/AddNumbersWebService/AddNumbersWebService/AddNumbers",
RequestNamespace:="http://tempuri.org/AddNumbersWebService/AddNumbersWebService",
ResponseNamespace:="http://tempuri.org/AddNumbersWebService/AddNumbersWebService",
Use:=System.Web.Services.Description.SoapBindingUse.Literal,
ParameterStyle:=System.Web.Services.Protocols.SoapParameterStyle.Wrapped)>
_
       Public Function AddNumbers(ByVal a1 As Integer, ByVal a2 As
Integer) As String
           Dim results() As Object = Me.Invoke("AddNumbers", New
Object() {a1, a2})
           Return CType(results(0),String)
       End Function
       
       '<remarks/>
       Public Function BeginAddNumbers(ByVal a1 As Integer, ByVal a2
As Integer, ByVal callback As System.AsyncCallback, ByVal asyncState
As Object) As System.IAsyncResult
           Return Me.BeginInvoke("AddNumbers", New Object() {a1, a2},
callback, asyncState)
       End Function
       
       '<remarks/>
       Public Function EndAddNumbers(ByVal asyncResult As
System.IAsyncResult) As String
           Dim results() As Object = Me.EndInvoke(asyncResult)
           Return CType(results(0),String)
       End Function
   End Class
End Namespace