Kerberos not being used, only NTLM - Login failed for user '(null)'

From: DougM (doogie_of_oz_at_hotmail.com)
Date: 09/22/04 

Date: 22 Sep 2004 00:10:29 -0700

We have a Win2K3 Server running an ASP .NET application that connects
to a Win2K3 server running SQL 2000 on the backend.

Whenever a user opens the application page in their client browser
they get the error message:
"The following error occurred whilst loading the page: Login failed
for user '(null)'. Reason: Not associated with a trusted SQL Server
connection."

We have been through all the newsgroups, the Microsoft
"Troubleshooting Kerberos Delegation" whitepaper, the Microsoft
"Troubleshooting Kerberos Errors" whitepaper and it appears as though
Kerberos has been turned off for IIS on this middle tier server. When
a client connects it doesn't even attempt Kerberos authentication but
immediately authenticates with NTLM, which explains the login failure
for user '(null)' error. What we can't work out is why Kerberos isn't
even attempted.

Thanks in advance,
Doug.