why a 401 response on 2008 IIS 7 webserver?

When you used adsutil.vbs or IIS 6 scripting tools in general on 2008 server, the RESULT is a broken IIS vdir or worse.
adsutil.vbs is a tool for IIS 6 on 2003 server.
appcmd.exe is the correct tool for manging IIS on 2008
if you use it or any IIS 6.0 scripting tools to create a vdir on 2008's IIS 7, you will get a 401 server response.the reason for this is b/c in the main config C:\Windows\System32\inetsrv\config\applicationHost.config, something like this gets added:
%computername%" />
It creates anonymous access for an account that does not exist.only IUSR exists on 2008 unless you have FTP running!
so resolution is to remove the entry and add it back via appcmd.exe tool OR to install FTP. when you install FTP, the account will be created.