Users can't open document lib in WSS v3 using Windows Explorer.Users on IE8 have this issues I have done everyhting from the below: Please verify the following three steps:
1. WebClient service is started
2. Published site name is part of the Local intranet zone in Internet explorer
3. Enable Basic Authentication for WebDav by setting the BasicAuthLevel registry entry to a value of 2 in the following key;
Windows Registry Editor Version 5.00
[HKEY_LOCAL_MACHINE\SYSTEM\CurrentControlSet\services\WebClient\Parameters]
"BasicAuthLevel"=dword:00000002
But no luck. Any ideas. Could this be the proxy???