Sometime in a non AD environment you need a user to run an App Pool so you can do cross server work (i.e. SQL). Before you can use the user in the App Pool identity you have to tell ASP.NET that they should be allow to run ASP.NET.

Simple command to run from the C:\WINDOWS\Microsoft.NET\Framework\v2.0.50727 directory

aspnet_regiis.exe –ga [UserName]

This will tell ASP.NET to allow this user to access temp directories and the assembly code.