If you have a web application that will run inside a network, it makes sense for it to support windows authentication (active directory?).
Would it make sense to us
Basically windows handles everything, you never store usernames or passwords, AD and IIS do all the work for you
add this to your web.config
<system.web>
...
<authentication mode="Windows"/>
...
</system.web>
To configure Windows authentication
You can then deal with the business or authorization using web.config
again. for example
<authorization>
<deny users="DomainName\UserName" />
<allow roles="DomainName\WindowsGroup" />
</authorization>
Read more here: http://msdn.microsoft.com/en-us/library/ms998358.aspx
This problem is solved in detail by Mr. Scott Guthrie in Link 1 and Link 2
I used windows security on some of my internal sites.
Basically the way I set it up is I remove anonymous access in IIS, then assign permissions on the sites files though the standard windows security model.
I'm not sure if this is the best practices, but it has always worked well for me.