Sharepoint Services 3.0 Extranet Authentication

So heres my frustrating problem. I might leave some stuff out… but … I will explain:

When I create a test web site in IIS, NTLM (index.htm … saying “hello world”) Authentication box pops up. I enter correct credentials and the page loads.

When I create my sharepoint site collection, IIS set to NTLM Authentication. I connect from an external computer and the authenication box pops up. I enter correct credentials and “Internet Explorer cannot display web page”. If I enter incorrect credentials I get an IIS fail page saying incorrect credentials.

All ports are open and as far as I know all settings are correct. I have tried this nearly 20 times… reinstalling, testing different things and nothing works.. Has anyone else run into the same problem? If so pls help, this is driving me crazy.