Configure basic authentication using the instructions from microsoft. But for the Default Domain Name, type your computer name. To find your computer name, click start, right-click computer, click properties, and search for your computer name there :)
Next, create users like you would normally do on windows 7. or if you don't know how to do it, go control-panel, users, add account.....blah blah blah.... Get It?
Next go to iis and set permissions for the user you just created. Be carefull to set the permissions to make it exactly how you want it.
That's all! To login, the username and password!
NOTE: The username should be simple letters, not capital. I'm not sure about this, that's why i told you this.