IIS - Web Server [Windows XP Pro]

I have a windows XP Professional desktop and it is not in a domain it is in a workgroup.
IIS is on it, and it acts as a webserver for internal use and external use.

I want to set security on the website, where when you put the URL in the browser it asks for user name ID and password.

Under the web properties > Security Tab, I unchecked anonymous logon.
I created a user id on the local machine.
You cannot set NTFS permissions because the machine is in workgroup, and the directory is web shared.
When I access the website, it asks for a user id and password but it defaults to guest. Now that account is disabled for security.

Then it says you do no have permissions to access home directory.
Read permissions are defined in IIS.

Can you give me any clues on what else I should do?
thanks

You need to set NTFS permissions.

In Windows Explorer, go to Tools | Folder Options | View and disable Simple File Sharing. That should make the NTFS security stuff visible.