Resolution:
1.Add the following into the web.xml file of your manager after the &ltfilter> … </filter> tag set for manager SSO

&ltfilter-mapping>
&ltfilter-name&gtauthFilter</filter-name>
&lturl-pattern>/director/PublicDriverChannel</url-pattern>
</filter-mapping>

2. Apply the following KB on the driver machine http://support.microsoft.com/kb/308339

3. Set the DSKerberosRealm and DSKerberosKDC in the driver.properties file or set them programmatically.

DSKerberosRealm = KERBEROS_REALM
DSKerberosKDC = ACTIVE_DIRECTORY_SERVER

e.g.

DSKerberosRealm=TESTAD.LOCAL DSKerberosKDC=dsldn-vm2k3AD-01.testad.local

4. For C++ and .Net drivers, you have to create a file called krb5.ini and put it in the c:windows directory of your driver machine.

Contents of krb5.ini

[libdefaults]
default_tgs_enctypes = AES256-CTS RC4-HMAC DES-CBC-MD5 DES-CBC-CRC
default_tkt_enctypes = AES256-CTS RC4-HMAC DES-CBC-MD5 DES-CBC-CRC
preferred_enctypes = AES256-CTS RC4-HMAC DES-CBC-MD5 DES-CBC-CRC

[domain_realm] .your.domain = YOUR.DOMAIN ActiveDirectoryMachineName = YOUR.DOMAIN ActiveDirectoryMachineName.your.domain = YOUR.DOMAIN

---------------------------------------------------------------------------

An example of krb5.ini

[libdefaults] default_tgs_enctypes = AES256-CTS RC4-HMAC DES-CBC-MD5 DES-CBC-CRC default_tkt_enctypes = AES256-CTS RC4-HMAC DES-CBC-MD5 DES-CBC-CRC preferred_enctypes = AES256-CTS RC4-HMAC DES-CBC-MD5 DES-CBC-CRC

[domain_realm] .testad.local = TESTAD.LOCAL dsldn-vm2k3AD-01 = TESTAD.LOCAL dsldn-vm2k3AD-01.testad.local = TESTAD.LOCAL