To start with:


1.Can users  in the local domain  add folders  and documents?
2.Can the users login the site using the IP address  of the machine?
3.What is the permission assigned on the document library?

Have you read the white paper in the resource kit on "Deploying Microsoft
SharePoint Portal Server 2001 Across an Extranet?" It is in the SharePoint
Portral Resource Kit under Deplyment.

1. The administrator  on the local  machine (SPS) cannot add  folders nor documents
in the portal. But can via the web  folders.
2. users  can log  into the site using the IP address  without SSL (http://). But
when users log into the site using the IP address with SSL (https://), I get
usual proxy error message:

An unexpected error occurred.

* An error occurred while accessing the dashboard. This error may be caused by
the proxy server  settings for the dashboard. Contact your server administrator.
If you are a server administrator, configure the proxy server settings by using
the proxycfg utility. Consult the product documentation and the readme for more
information about configuring the proxy server settings. Important: You must
configure the proxy server settings for the dashboard even if you are not using
a proxy server. (1)
Object or data matching the name, range, or selection criteria was not found
within the scope of this operation.
* -2147217895

Also, when the users are able to log in using http://, I'm able to add folders
and documents.
3. All the users are coordinators.

I have one more thing to add:

I created two web  folders, one with the NetBIOS name of the server  with http://
and I'm able to configure all my security settings. The other web folder, I'm
using https:// and the box under the security tab is empty and the Use parent
folder's security settings checkbox is checked. When I uncheck that box and try
to add users  manually, I get this error message:

Object picker cannot open because it cannot determine whether xxx is joined to
the domain.

I think this is where the problem is because under https:// nobody has rights to
the documents  folder. But under http://, they do.

I meant to say whether the users  in the intranet  domain can log  in the
site and add  documents or not over Http protocol.
If no then tere is some problem related to permissions and security .

Do one more thing.
Start fresh
Assign a 2 domain  users one as an author and another as administraof
the workspace.Restart the machine.
Login in a machine with that user credentials and try accessing the site
normally over http protocol.

Yes, users  can log  in using http://. I added  2 users, 1 with coordinator role
and one with author role. Both of them logged in using http:// and they can add
folders and documents. For some reason, this does not with https://.

Agian have you configured your extrranet site in accordance with the White Paper
[ www.microsoft.com/.../extranet.asp ].
SSL has to be configured properly in IIS