Alright, sorry for how long this took before you got a reply. I've been majorly busy lately, and this would be a rather lengthy reply.

But I found a nice link to point you in the right direction, so I don't have to do all the gum-flapping myself See here:
http://www.ezine.com/QandA/IISpassword.html

I believe this is based on IIS 4.0, but it works exactly the same for IIS 5.0 too.