SQL ERROR FILE SYSTEM VS HTTP://

HI- I have developed an ASP.NET website using VS 2005 Created as an HTTP:// type project. It worked just fine. I then moved the SQL database to the production server. and made appropriate changes to the WEB.CONFIG file. I am now getting an error when trying to access the database. The Error is:Login failed for user ''. When I started trouble shooting this is what I discovered: I created a very simple website that used a gridview bound to a the data table on the remote server. Displayed on screen fine. I noticed that I accidently created the project as a File System type. I then duplicated the exact same simple test project only this time created as an HTTP type saved on the local IIS/wwwroot. The second scenario would not work and gives the same error. Could someone please explain why scenario 1 worked and scenario 2 would not? And what I need to do to correct the problem? Thanks-- Mike