Basically they sent me working wireframes. I have always liked taking the working wireframes and putting them into IIS so that other members of our development team and project management staff can see the progress on the wireframes and so that we have an easy way of comparing the SharePoint site to the wireframes.
Not really wanting to spend a bunch of time learning why they were green I proceeded on to setup a web site on our staging server in IIS 7. This was all pretty simple and I have done it so many times I have lost count.
It was supposed to be simple, take the files and put them into a directory, create a web site using the IIS manager, ensure that the application pool identity account had read access to the directory and it should be done.
Much to my surprise I found that when I browsed to the web site, I was repeatedly prompted for my credentials.
At first I thought I missed something in my rush to configure the web site and move on to something more important, I hadn't, well I had I just didn't realize what the simple part I missed was.
So after approximately 6 hours, I asked one of the other guys in my office if he had ever seen a file with a green file name, he hadn't. We were both poking around the files and found that if you selected one of the green files, did a right click properties and clicked the advanced button that the files were ENCRYPTED.
So apparently IIS doesn't like serving up files that have been encrypted and will repeatedly ask you for your credentials.
This post is mainly for me so that if I ever run across the little evil green files again it won't take me quite so long to figure out why they are green.
Hopefully it will also help others as well.