When logged into a password protected FTP site in IE7 the folders and files are displayed as expected. However, you can no longer drag and drop files between IE and other applications such as Windows Explorer.
The feature available from the "Page" drop down menu to "Open FTP Site in Windows Explorer" does not appear to function correctly.
In developing a webite with multiple password protected webpages and FTP folders, IE7 appears to pass either the WRONG username and password to Windows Explorer or NO username and password to Windows Explorer. For example, when viewing the password protected FTP folder for CLIENT1 in IE7, IE7 opens the password protected FTP folder for a completely different user, such as CLIENT2. Since at some earlier time the usernames and passwords for CLIENT1 and CLIENT2 have been used, it appears as if IE7 has selected the WRONG username and password when attempting to "Open FTP Site in Windows Explorer".
When we attempted to make a bug report to Microsoft via 800-MICROSOFT, we were told that we had to pay $35.00, and that IF it was an actual bug, our $35.00 would be refunded. It concerns me greatly that Microsoft wants us to pay them money to report such a serious security flaw to them.
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