Figured it out.

I had made my inetpub/myproject directory the home directory in IIS for 
the
Default Web site.

This apparently caused Interdev to get confused about where files are
located.  Never in my wildest dreams did I believe that this would 
cause
Interdev to ask for a User ID and password - perhaps a "File Not Found"
message would be more appropriate - but that's life in Softwareland i
guess...

Regards and thanks to all.

John