Webdav support IE, but not Outlook 2007 Calendar sharing

I verified webdav is enabled for my user and the dav.digest.passwd file exist at:

/home/sanpedrosalcedo/etc/dav.digest.passwd

Problem I'm having is if I use IE8 to authenticate it's fine but if I use shared calendars in Outlook 2007 via Webdav I keep getting reprompted for my user/pass which I enter the same user/password that I used in IE8. I see others have had similar issues, but there were no reports on how to fix it.

I'm trying to create a shared calendar for a customer and this would be extremely helpful if I could get it work.

I've also attached the log if that helps any.

Thanks in advance,

-Paul