very strange: found this it may help: taken from
http://www.digitalspy.co.uk/forums/showthread.php?referrerid=109801&t=343816Before setting up your WebDAV publishing directory, ensure that your publishing directory resides in an NTFS partition and be sure the WebDAV extension is enabled in IIS Manager.
To verify this, check the WebDAV option under the Web Service Extensions node in IIS Manager
Extra stuff in case you have to set it up from scratch or want to check settings:
Create a directory on your Web server and set the desired NTFS permissions. You can create this directory anywhere on your Web server.
In IIS Manager, create a virtual directory and set the desired virtual directory permissions. For instructions, see Using Virtual Directories.
Type WebDAV as the alias for this virtual directory, and link it to the physical directory you created.
After you finish setting up a WebDAV virtual directory, you can allow clients to publish to it. For information on how users can connect to the directory through any of the Microsoft WebDAV clients, see About WebDAV.
For more information about NTFS and IIS user rights, see Access Control with IIS 6.0.
Bit of info on the error you're getting:
When any non-specific error message occurs when you attempt to open a Web Folder, you receive the following prompt to browse to the URL:
Internet Explorer could not open Web_address as a Web Folder. Would you like to see its default view instead?
If you click No, the procedure is canceled. If you click Yes, Internet Explorer attempts to open the Web site. If Internet Explorer is unable to open the Web site, you may have specified a server that does not exist. If Internet Explorer can open the Web site, you may have specified a protocol that is not supported by Web Folders, or the server does not support the WebDAV protocol or does not have FrontPage Extensions installed.