Typically, you have to grant access to all objects, folders, etc to IUSR_("your computer name" - in low isolation) and/or IWAM_("your computer name" in pooled or high isolation) accounts. If you're accessing dbfs across the network or SQL\MSDE then you have to set up impersonation in COM+ for the VFP mtdll ...
>I am doing the testing on IIS running on my machine. I went into the Directory Security tab and placed my account details under the account used for anonymous access. I stopped and started the web service just in case, but it still does not work.