I just added an alternate access mapping entry to one of my web applications and upon trying to access it in the browser I am prompted for authentication over and over again without ever being permitted in. Even entering the site url as a trusted intranet site in IE the prompts do not cease.
Maybe it's the problem with DisableLoopBack. http://support.microsoft.com/kb/896861/en-us
An IISReset on the web server cleared it up but I am not sure why it took that to fix it.