To get it to work with IIS try using this code before setting your "$auth = 0" and the "if (isset($PHP_AUTH_USER) && isset($PHP_AUTH_PW))"

<?php
//////////////////////////////////////////

if ($PHP_AUTH_USER == "" && $PHP_AUTH_PW == "" && ereg("^Basic ", $HTTP_AUTHORIZATION)) 
{ 
  list($PHP_AUTH_USER, $PHP_AUTH_PW) = 
    explode(":", base64_decode(substr($HTTP_AUTHORIZATION, 6))); 
}

//////////////////////////////////////////
?>

It worked for me on IIS 5 and PHP 4 in ISAPI