SSO with SharePoint 2007

We can maintain SSO (single sign on) between SharePoint 2003 and a third 
party WebSSO provider.  This is done by passing to the WebSSO provider the 
authenticated domain user name and password, then creating a user context 
with LogonUser, and returning control to the web server.  IIS then passes the 
user context to SharePoint 2003 allowing us to maintain SSO.  Unfortunately 
we can not do the same with SharePoint 2007.

Calling LogonUser to pass the user information to SharePoint 2007 causes the 
web browser to hang indefinitely.   If we skip calling LogonUser or leave the 
username and password name fields blank, we get challenged for valid 
credentials by both the WebSSO provider as well as SharePoint 2007