Vista ASP.Net Identity Impersonate="Not Likely"

I recently upgraded a project from .Net 1.1 to .Net 2.0 for a multitude of reasons. Possibly my favorite is so I can develop in VS2005 on my Vista development box without needing to use a Virtual PC image running XP and VS2003. That will make the backups of my development database much easier to manage.

Anyway, when I did that, I started getting GDI+ errors on all my pages containing Infragistics webcharts. With the help of David Negley (Infragistics) we identified that this was a permissions error on the folder the charts were rendered into. It did not initially look like a permissions error (UnauthorizedAccessException) because when I was actively debugging, the charts rendered fine. No errors. What?#@#! During testing I set Full control permissions to the following accounts: Network Service, ASPNET, Everyone, Users, NeighborsDogMilo, etc. Still no dice. The application was configured to Impersonate which to my surprise does not work as expected in Vista/IIS7. As soon as I set Identity Impersonate="False" everything worked great.