My account does have permissions to create users. I am running in Process. My account does have permissions to create users. NTLM is actually working. You can use NTLM if the servers you wish to impersonateacross reside on the same box.
Clear text is the only way to impersonate across machines.
In other words if the domain that you want to manipulate is not on the same box as the IIS they you have to use basic. Configuring NTLM with ADSI ADSI Part II describes and demonstrations the power of ADSI by showing how to manipulate the NTLM database. Examples in this article show how to add a user to a domain, delete the user, add a group, and add the user to the group. There is also a discussion on security and an overview of the Group, User and Domain ADSI objects. Copyright 2001 INT Media Group Incorporated.