Security :: Impersonation With IIS And UNC Virtual Path Share

It took me 6 hours to figure this one out and I'm wondering if someone can give me an answer why it has to work this way. I have two PCs, one is a webserver win2k 2003 and the other is the file server running Windows XP. Both PCs are on the same company domain therefore they can see each user. The share folder has NETWORK, NETWORK SERVICE, USERS (which include IIS authenticated users), a LOCAL account, and a specific User (which is me) that is given access to read. In my web application, I call a server.mappath. In IIS6.0, anonymous is disabled so users use integrated Windows Authentication. I can see this by verifiying User.Identity.Name.ToString(); Next, I also check WindowsIdentity.GetCurrent().Name.ToString();. In my first run, I set impersonate to true and thats it. Both User.Identity and both Windows.Identity show: mydomainsmith_B as an example.

When trying to access the UNC virtual path whcih has "Always use the authenticated user's credentials when validating access to the network directory" checked. This means , IIS6.0 will pass mydomainsmith_B credentials to the file server. I get an access denied which is verified by a thrown exception. I go back and check the file server and under the security tabs, I did add myself which shows smith_B under the security and for kicks, I'm also under Share tab.

Next, I try to authenticate using a "LOCAL" account on the file server. The local account is called username/password: temp/temp. So I set web.config to impersonate=true, userName=temp password=temp. Okay, so I go back into IIS 6.0 and for the virtual directory, I go to "Connect As" and set Username and password to: temp/temp and un-check "always use the authenticated user's credential". Finally, i reload the page. This time the page shows me:

User.Identity.Name: mydomainsmith_B
WindowsIdentity.GetCurrent().Name: temp

perfect, so now I'm impersonating temp. I click a button to access the UNC path and boom, it all works. So why doesn't my local PC authenticate ME, as MYSELF, which is on the domain, which is on the same domain. Why do I have to impersonate a local account to the file server? Why can't I just impersonate myself? Also, If I disable impersonation, it becomes NT AUTHORITYNETWORK SERVICE. This service also can't access the UNC path even when I have enabled the same security and same share settings.