I am creating my first website using MOSS 2010 using administration console and unfortunatly unable to authenticate the user on publishing portal. During web application creation I set authentication mode to 'Classic mode authentication'. After successfully creating web site, site collection and top level site, when I try to access the web site, it prompts me for credentials. Now issue is

Why it prompts me for credentials if anonymous access is enabled and secondly even if I provide the correct windows credentials, authentication fails.

Any idea? do I have to configure any service application etc. please note that MOSS 2010 is installed on Windows 2008 machine