Office server extensions help

I am trying to set up a small intranet with the office collaboration features of OSE. When I open a doc from my web folder I can collaborate and everything seems to work fine. However, if I open the doc from a browser, I can only view the doc. Discussions do not work, and I cannot edit the doc either.

Here is what I have tried so far.
1.) I have set web permissions to r/w/e
2.) I have set NTFS permissions to r/w/e
3.) I have used the offic extentions admin site to set web discussions from this server only to all documents.

Not sure what else to try. I believe it has something to do with the fact that it is not seeing my windows user info from the browser, therefore it things I am anonymous and should be read only.

Hopefully this makes sense.

Thanks in advance.