As far as I know, in SQL 2005, they removed IIS support for SQL XML.
The latest version that supports IIS is; SQLXML 3 SP 3. Actually I am using and loving IIS support of SQLXML on live systems. You can still use SQL XML 3.
Anyway, I needed the same features with authentication of SQLXML and I created a similiar application with .Net 2.0 which requires Enterprise Library January 2006 edition. Currently I am testing it with XP SP2 machine and it is working out pretty well.
You need Enterprise Library January 2006 and Edition Visual Studio 2005 also IIS 5 or 6 and some Database connection. The configuration design is handled through Enterprise Libraries, Configuration Tool, the source uses many of the Application Blocks in Ent
You have executors (Database SP executor, MSMQ Executor, Assembly Executor, IronPython Executor or .NetCode Executor), the results of the executors are returned to the clients through generators (WebService, RSS, JSON, Excel or Text).
If you want further discussion, you can contact me at firstname.lastname@example.org.