Getting "Server returned http response code: 401 for U

A user of mine was trying to run the xsl transformation that i usually
do and they got an error "Server returned http response code: 401 for
URL".
Basically my xml language you can specify includes like
<include href="http://OurIISIntranet/xml/bleh.xml" />

and a rule in the xsl will pull all nodes into the current
transformation to apply,
with a <xsl:apply-templates select="document(@href, .)/Document/*"/>

She can access this url when she goes into her browser so not sure why
she is being denied. Is this related to Windows authentication?
like maybe IE does domain authentication with IIS, but command-line
saxon wouldnt?
Not sure why it would work for me then.

Anyway let me know if have any ideas I can try, Thanks,
Arian