Hi - this has been resolved
In case this helps someone in the future, here are the steps our team used to fix the problem. (Note a new 8.0.1 MSTR install on new servers).
In IIS on the web server, we looked at the properties of the setting 'web sites'. We checked the box 'Enable anonymous access', created a user called IUSR_<server_name> (not sure what we used for a password), and checked the box 'Integrated Windows authentication'.
We added IUSR to the Security Properties on the Web server folder called 'Web ASP'. We also added a user called IWAM<server_name> and granted the same access to this user. I think it was read/write.
Bounced IIS.
We tested on several machines and our performance with Internet Explorer was fantastic! We reversed the changes to see if my performance was degraded and it was. So, again we made the changes and tested again. Success!
My users are SO happy (so is my CIO!!).
compgeec