In order to implement Windows Authentication for Windows Server 2008 R2 (IIS 7.5), complete the following:

1.    In IIS, select FEOnline application pool
2.    Right click on FEOnline or Click Advanced Settings under the Actions menu
3.    Select Identity and click the ellipsis button that will appear when you click in the "ApplicationPoolIdentity" field   
4.    Select Custom, click Set and enter the domain\username and password for the user
5.    Click OK, OK, and OK