The quotes were just a test...

Ok I did get it to kind of work...

I put...
identity impersonate="true"
in the web config... also tried with diferent users and passwords.. even my logon (same user and password on both machines)

(Identity was an Idea from your e-mail from last year, and after searching and reading "Idenity impersonate" MS KB articles, on said that OLE DB passes NO idenity info to other machines!!! I thouht AHH thats the problem! but NOT quite out of the woods..)

The machine I am connecting to has a FAT32 C drive, NTFS D.

I can Now read from both, BUT can NOT write to the D (NTFS).
I have set up users on both machines and given FULL rights.
I have set the Web properties, Directory Security, Web Anonymous access and authentication control , to a user on both machines. and given Full rights to the D drive.

What am I missing??