I did something different to get around this problem. First I added the following to my .htaccess file:
# -FrontPage-
IndexIgnore .htaccess */.??* *~ *# */HEADER* */README* */_vti*
<Limit GET POST>
order deny,allow
deny from all
allow from all
</Limit>
<Limit PUT DELETE>
order deny,allow
deny from all
</Limit>
AuthName
www.yoursite.com
AuthUserFile /home/yoursite/public_html/_vti_pvt/service.pwd
AuthGroupFile /home/yoursite/public_html/_vti_pvt/service.grp
And then I checked the radio box that say "remember me" in the login form. No problems. For further testing, I cleared my cookie cache and tried again without checking the "remember me" box and it worked. On this site, I can only log in if I check the "remember me" box. So it is definately cookie handling. As far as the .htaccess mod, I guess it works since I can login without having to check "remember me", but I have no idea what the code I added does.