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IIS and Integrated Windows Authentication - login doesn't work for domain.com, works for IP address, localhost, 127.0.0.1

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http://serverfault.com – I've installed Windows Server 2003 R2 and IIS role (no Active Directory role). I've setup a virtual directory named 'test' and under Security tab of the 'test' Virtual Directory I've disabled the Anonymous login and enabled Integrated Windows Authentication. The server is on the local network. What I do is I access the test/ directory on the server using the browser. Here is the log: **IE on Server** localhost - works 127.0.0.1 - works, asks for password, 8 second delay domain.com - fails, asks for password, after 3 seconds asks for a password again, the username field chan (HowTos)