Jim
Are you using IE6 if so try a workstation using an older version of IE, had a similar problem here that only effected certain versions of IE5 (depending on what service pack is loaded) and IE6. If you have an old workstation with IE3 or IE4 and that works ok then there is a patch for IE6, it has problems handling certain authentication procedures. If this is the same problem as we had, it has been fixed and broken with different service pack releases for Internet Explorer 5&6 over a period of time. We got a patch from Microsoft that fixed the problem however we have noticed that IE6 on Windows XP with service pack 2 does not appear to have this problem.
This may not be relevant to your case Jim but hope it may shed some light on it. Sorry under presssure at the moment, hope this post makes sense or is of help, in hurry have to go.
Best regrds
Jack