Configuration Error, Authentication Problem

I am trying to set up a virtual directory and then have a program list all the files within the directory. The programs path is: http://powintranet/Developer/Jesse/...r/WebForm1.aspx
and it's trying to access the virtual directory //powapp1/draw

The result is the error below. I have found many posts on this error, but I haven't found an answer that really seems to work for me:

Configuration Error
Description: An error occurred during the processing of a configuration file required to service this request. Please review the specific error details below and modify your configuration file appropriately.

Parser Error Message: It is an error to use a section registered as allowDefinition='MachineToApplication' beyond application level. This error can be caused by a virtual directory not being configured as an application in IIS.

Source Error:

Line 39: <authentication mode="Windows" />


I have also found posts where people recommend quote:
Go to IIS and expand out Default Web Server and then navagate to the correct folder. Right click, select properties and then click the Create button.

Unfortunately I can never find this "Create Button" everyone speaks of.

If anyone has any ideas it would be much appreciated.

i've got the same problem ....
u can find the name in computer management under:
services->iis services->web sites->default web site->[your project name]
then right click->properties->directory->create
it worked 4 me!

Ok... I have even a bigger problem. Same issue. How do you correct it when your ISP is the one with access to IIS