System.IO Exception: Logon failure: unknown user name or bad password - asp.net

Question

System.IO Exception: Logon failure: unknown user name or bad password.
1 minute ago | LINK
Hi All I am trying to resolve this issue with all possible solutions but could not succeed.
Requirement - I should be able to access XML file located in network share share folder for validation of users and other purposes.
Problem: I am able to access the XML file located in Network Share folder when debugging using VS 2010 but not when i published to IIS 7.
Methods Approached: I created a user account XXX and with password and made the user part of Administrators group. Set the website application pool identity to custome user account(XXX) created.
In the web.config I added a line:
<identity impersonate="true" userName="XXX" password="XXXXX"/>
Code where exception is caught-
string UserConfigXML ="\\\\servername\\Engineering\\Kiosk Back Up\\UserCFG.XML";
reader = new StreamReader(UserConfigXML);
string input = null;
string[] sArray;
while ((input = reader.ReadLine().Trim()) != "</USERS>")
{
if (input.Contains("<USER NAME="))
{
sArray = input.Split(new Char[] { '"' });
string sUserName = sArray[1].ToString().ToUpper();
string sDelivery = "";
while ((input = reader.ReadLine().Trim()) != ("</USER>"))
{
char[] array2 = new char[] { '<', '>' };
if (input.Contains("<DELIVERY_MECHANISM>"))
{
string[] mechanism = input.Split(array2);
sDelivery = mechanism[2].ToString().ToUpper();
if (sDelivery == "WEBMAIL")
{
UsersList.Add(sUserName);
}
}
}
}
}
return UsersList;
Any ideas how to resolve the issue?.

Answer 1

I propose 3 fixes for 2 different scenarios:
If you have both computers (server & computer holding the xml) hooked up using domain authentication: create a domain user and give it rights to access that file in the computer holding the xml.
Any other situation than the one mentioned above: create a user with the same name and password on both computers and set that as the one impersonated by the application pool.
(UNSECURE) Works in any scenario, without impersonation: put the XMLs in a network share that allows anonymous access.