Windows 2003 sp1 and Windows 2008 and later have a feature to check for web access security which check for URL access as FQDN.in simpler word, The server does not allow web access through FQDN. This cause 401.1 error is we try to do so. The remedy
is to disable loopback onto the server or exclude URLS which should be free from this security check.
look here for more info:
http://sharepoint2010shyju.blogspot.in/2011/01/loop-back-issue-in-sharepoint.html
Ashish Ranjan (Please click "Marked As Answer" if a post solves your problem or "Vote As Helpful" if a post has been useful to you)
