When you try to view the shared documents in explorer view for the site http://mysiteurl/default.aspx?PageView=Shared using IE8 browser, you are getting the following error “ Page cannot be displayed”
The approach we took to identify the Root Cause:
We capture the Netmon and the Fiddler trace while reproducing the issue from IE 7 and then IE 8 (working/non working)
In the non working one we see the following:-
HTTP/1.1 401 Unauthorized
WWW-Authenticate: Basic realm="irgec"
Date: Tue, 21 Dec 2010 07:06:13 GMT
So User-Agent is Microsoft-WebDAV-MiniRedir/6.1.7600 not IE.
Looks like when you have basic auth WebDav Miniredirect is not able to get the windows token and then fails.
We set the Authentication to NTLM in IIS and that fixed the issue.