IIS passing server credentials rather than user credentials

We are developing a web app using II6, ASP .Net 2.0 on a Win2003 box.
We are using VS2005 and building for .Net 2.0 framework.

We set IIS up to use integrated security. However when I access the
application through IE, it cannot connect to the server. When I check
the SQL Server logs, I see a failed attempt to login by <domain
name>\<web server name>. It looks like it is using the credentials
under which the web server is running.

he desired behavior is to use the profile of the domain user who is
using IE.

When I give <domain name>\<web server name> explicit access to the SQL
Server DB it, *can* connect.

This reeks of a misconfiguration. What could we be doing wrong?

TIA

.

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