ASP/SQL/IIS security settings

This is what I found out. For some very odd reason, which I am yet to find out, apparently, there are security settings forbid one of my virtual directory under administrator's account to work properly.

This is what I had, IIS (XP), MSDE, one of the ASP.Net starter kit. Let's just say, I got everything else working (which was a pain by the way, will summerize that in next post). If my ASP virtual directory is under my administor's desktop, then the apps will fail to work due to security setting (access denied or directory not found). Yet, if I MOVE the directory to anywhere else, then my ASP virtual directory works. Database system was unchanged, Database for the apps was unchanged. Everything inside/in herited by the apps were unchanged. Yet, it just magically works... Weird huh?

It is possible that one of the settings I did for Microsoft Baseline Security Anaylizer messed it up. Wonder if anyone got 2cents?