Setting Up User Authentication

Chat Service can authenticate users with the following methods:

Using Chat Service clear-text or NTLM authentication. With Chat Service clear-text authentication, users are authenticated by their unencrypted chat client password which is sent to the server by way of the PASS command. This is the least secure method of authenticating users.
With NTLM, users are authenticated by their encrypted Windows NT password which is sent to the server by way of the AUTH command.
Using Microsoft Site Server version 3.0 Authentication Service. Authentication Service provides two methods for authenticating chat users:
Basic Authentication. An authentication method provided with Site Server that uses an unencrypted (clear-text) password to authenticate users.
Distributed Password Authentication (DPA). An SSPI authentication package that stores encrypted user information in a central or distributed authentication database.