TFS Team Web Access - Users being asked for credentials (and rejected)

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BEFORE: I had a TFS 2010 on a temporary test environment set up with a project and I had web users and everything worked great.

NOW: I've installed it on a permanent environment (same O/S, domain, everything) but any permissions I set no longer seem to have any effect.

It seems only the service account can access any features.
Authentication is NTLM.

Any network users I give access to are either being asked for their credentials to connect to the server and being rejected regardless (they can connect to the default IIS fine) or they get:

500 - Internal server error. There is a problem with the resource you are looking for, and it cannot be displayed.

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Terry On BEST ANSWER

Ridiculous, but the problem is that the new install was on the E: not the C: so the local NETWORK SERVICE account (that I use as a service account for TFS) did not have access to the files/folders under \Program Files\Microsoft Team Foundation Server 2010\