Microsoft Knowledge Base Article
837104 contains the following summary and introduction:
SUMMARY When you install the Security Update in Microsoft Security Bulletin MS04-004 on your computer, some of your Web applications that pass credentials through a URL may break. This article discusses several methods to work around this problem and discusses the limitations of each method.
This article discusses how to pass the user credentials through the URL for Single Sign-On (SSO) by using Basic authentication. When you install the Security Update in Microsoft Security Bulletin MS04-004, you cannot pass credentials through the URL.