Going still crazy about this error.
I've already changed the permissions of oracle home directory and all it's subdirectories including BIN. I also checked the files one by one

The ASP.NET Machine Account has rights to read open execute whatever privileges to access to the oracle directory. I compare my two machines ( My Local Machine and Server Machine) and they have the same asp.net account privileges to all sub directories of oracle home.
And we're already using Oracle ODBC driver...
Configuration #1:
My Local machine running IIS 5.1( and my web application) and has oracle 10.1.0 installed (but not running an instance)
Server Running Oracle 10.2.0.2.0 installed (and running the instance needed by my application)
Authentication succeeds and web application works
Configuration #2:
Server Running IIS 6.0 (and my web application) and has oracle 10.2.0.2.0 installed (and running instance needed by my application)
Authentication service fails to start or initialize what ever and my application does not work ?!
ok now, please forgive me for this one. This is not a "play on my home" project. So that i should do this

Would anyone please check this trace log file that my error created.
There are some specific points that "ERROR" and "Oracle error" words occur. Might be helpful while skimming.
[DT] represents DATE and TIME string. I've replaced them with [DT] to shorten load...
Code:
.
.
.
[DT] nacomap: Packet length 158
# of services 4
Error sent? FALSE
[DT] nacomap: Version transmitted: Oracle Advanced Security: Oracle Advanced Security for 32-bit Windows: Version 10.2.0.2.0 - Production
[DT] nacomps: entry
[DT] nacomps: service supervisor
# of fields 3
ORACLE error 0
[DT] nacomps: data length 4
data type version stamp
[DT] nacomps: data length 8
data type raw data
[DT] nacomps: data length 18
data type raw data
[DT] nacomps: service authentication
# of fields 5
ORACLE error 0
[DT] nacomps: data length 4
data type version stamp
[DT] nacomps: data length 2
data type 2 byte numeric
[DT] nacomps: data length 2
data type status
[DT] nacomps: data length 1
data type 1 byte numeric
[DT] nacomps: data length 3
data type string
[DT] nacomps: service encryption
# of fields 2
ORACLE error 0
[DT] nacomps: data length 4
data type version stamp
[DT] nacomps: data length 12
data type raw data
[DT] nacomps: service crypto-checksumming
# of fields 2
ORACLE error 0
[DT] nacomps: data length 4
data type version stamp
[DT] nacomps: data length 3
data type raw data
[DT] nacomps: exit
[DT] nacomap: exit
[DT] nacomsn: sending 158 bytes
[DT] nsnasend: entry
[DT] nsnasend: bytes to send: 158
[DT] nsdo: entry
[DT] nsdo: cid=0, opcode=67, *bl=158, *what=1, uflgs=0x22, cflgs=0x3
[DT] snsbitts_ts: entry
[DT] snsbitts_ts: acquired the bit
[DT] snsbitts_ts: normal exit
[DT] nsdo: rank=64, nsctxrnk=0
[DT] snsbitcl_ts: entry
[DT] snsbitcl_ts: normal exit
[DT] nsdo: nsctx: state=8, flg=0x2400d, mvd=0
[DT] nsdo: gtn=32, gtc=32, ptn=10, ptc=2011
[DT] nsdo: 158 bytes to NS buffer
[DT] nsdoacts: entry
[DT] nsdofls: entry
[DT] nsdofls: DATA flags: 0x0
[DT] nsdofls: sending NSPTDA packet
[DT] nspsend: entry
[DT] nspsend: plen=168, type=6
[DT] nttwr: entry
[DT] nttwr: socket 1052 had bytes written=168
[DT] nttwr: exit
- some packet dump here-
[DT] nspsend: 168 bytes to transport
[DT] nspsend: normal exit
[DT] nsdofls: exit (0)
[DT] nsdoacts: flushing transport
[DT] nttctl: entry
[DT] nsdoacts: normal exit
[DT] snsbitts_ts: entry
[DT] snsbitts_ts: acquired the bit
[DT] snsbitts_ts: normal exit
[DT] nsdo: nsctxrnk=0
[DT] snsbitcl_ts: entry
[DT] snsbitcl_ts: normal exit
[DT] nsdo: normal exit
[DT] nsnasend: normal exit
[DT] nacompd: entry
[DT] nacompd: exit
[DT] nacomsn: exit
[DT] na_receive_packet: entry
[DT] nacomrc: entry
[DT] nsnareceive: entry
[DT] nsnareceive: buffer address: 0xe5f6ca8 bytes wanted: 2048
[DT] nsnareceive: calling NS to receive 2048 bytes into address 0xe5f6ca8
[DT] nsdo: entry
[DT] nsdo: cid=0, opcode=68, *bl=2048, *what=0, uflgs=0x0, cflgs=0x3
[DT] snsbitts_ts: entry
[DT] snsbitts_ts: acquired the bit
[DT] snsbitts_ts: normal exit
[DT] nsdo: rank=64, nsctxrnk=0
[DT] snsbitcl_ts: entry
[DT] snsbitcl_ts: normal exit
[DT] nsdo: nsctx: state=8, flg=0x2400d, mvd=0
[DT] nsdo: gtn=32, gtc=32, ptn=10, ptc=2011
[DT] snsbitts_ts: entry
[DT] snsbitts_ts: acquired the bit
[DT] snsbitts_ts: normal exit
[DT] snsbitcl_ts: entry
[DT] snsbitcl_ts: normal exit
[DT] nsrdr: entry
[DT] nsrdr: recving a packet
[DT] nsprecv: entry
[DT] nsprecv: reading from transport...
[DT] nttrd: entry
[DT] nttrd: socket 1052 had bytes read=163
[DT] nttrd: exit
[DT] nsprecv: 163 bytes from transport
[DT] nsprecv: tlen=163, plen=163, type=6
-some packet dump-
[DT] nsprecv: normal exit
[DT] nsrdr: got NSPTDA packet
[DT] nsrdr: NSPTDA flags: 0x0
[DT] nsrdr: normal exit
[DT] snsbitts_ts: entry
[DT] snsbitts_ts: acquired the bit
[DT] snsbitts_ts: normal exit
[DT] snsbitcl_ts: entry
[DT] snsbitcl_ts: normal exit
[DT] nsdo: *what=1, *bl=2048
[DT] nsdo: 153 bytes from NS buffer
[DT] snsbitts_ts: entry
[DT] snsbitts_ts: acquired the bit
[DT] snsbitts_ts: normal exit
[DT] nsdo: nsctxrnk=0
[DT] snsbitcl_ts: entry
[DT] snsbitcl_ts: normal exit
[DT] nsdo: normal exit
[DT] nsnareceive: received 153 bytes
[DT] nsnareceive: no more data to receive - returning
[DT] nsnareceive: normal exit
[DT] nsnareceive: total bytes received: 153
[DT] nacomrc: received 153 bytes
[DT] nacomrc: total data length: 153 bytes
[DT] nacomrc: Version received: Oracle Advanced Security: Oracle Advanced Security for 32-bit Windows: Version 10.2.0.2.0 - Production
[DT] nacomrc: Length 153
# of services 4
Error rec'd? FALSE
[DT] nacomus: entry
[DT] nacomus: service supervisor
# of fields 3
ORACLE error 0
[DT] nacomdp: entry
[DT] nacomdp: direction: inbound
service: supervisor
data type: version stamp
data length: 4
[DT] nacomdp: exit
[DT] nacomdp: entry
[DT] nacomdp: direction: inbound
service: supervisor
data type: status
data length: 2
[DT] nacomdp: exit
[DT] nacomdp: entry
[DT] nacomdp: direction: inbound
service: supervisor
data type: raw data
data length: 14
[DT] nacomdp: exit
[DT] nacomus: exit
[DT] nacomus: entry
[DT] nacomus: service authentication
# of fields 7
ORACLE error 0
[DT] nacomdp: entry
[DT] nacomdp: direction: inbound
service: authentication
data type: version stamp
data length: 4
[DT] nacomdp: exit
[DT] nacomdp: entry
[DT] nacomdp: direction: inbound
service: authentication
data type: status
data length: 2
[DT] nacomdp: exit
[DT] nacomdp: entry
[DT] nacomdp: direction: inbound
service: authentication
data type: 1 byte numeric
data length: 1
[DT] nacomdp: exit
[DT] nacomdp: entry
[DT] nacomdp: direction: inbound
service: authentication
data type: string
data length: 3
[DT] nacomdp: exit
[DT] nacomdp: entry
[DT] nacomdp: direction: inbound
service: authentication
data type: version stamp
data length: 4
[DT] nacomdp: exit
[DT] nacomdp: entry
[DT] nacomdp: direction: inbound
service: authentication
data type: 4 byte numeric
data length: 4
[DT] nacomdp: exit
[DT] nacomdp: entry
[DT] nacomdp: direction: inbound
service: authentication
data type: 4 byte numeric
data length: 4
[DT] nacomdp: exit
[DT] nacomus: exit
[DT] nacomus: entry
[DT] nacomus: service encryption
# of fields 2
ORACLE error 0
[DT] nacomdp: entry
[DT] nacomdp: direction: inbound
service: encryption
data type: version stamp
data length: 4
[DT] nacomdp: exit
[DT] nacomdp: entry
[DT] nacomdp: direction: inbound
service: encryption
data type: 1 byte numeric
data length: 1
[DT] nacomdp: exit
[DT] nacomus: exit
[DT] nacomus: entry
[DT] nacomus: service crypto-checksumming
# of fields 2
ORACLE error 0
[DT] nacomdp: entry
[DT] nacomdp: direction: inbound
service: crypto-checksumming
data type: version stamp
data length: 4
[DT] nacomdp: exit
[DT] nacomdp: entry
[DT] nacomdp: direction: inbound
service: crypto-checksumming
data type: 1 byte numeric
data length: 1
[DT] nacomdp: exit
[DT] nacomus: exit
[DT] nacomrc: exit
[DT] na_receive_packet: exit
[DT] na_csrd: entry
[DT] nas_ccn: entry
[DT] nacomrp: entry
[DT] nacomrp: exit
[DT] nas_gusl: exit
[DT] nas_ccn: exit
[DT] nau_ccn: entry
[DT] nau_rpv: entry
[DT] nacomrp: entry
[DT] nacomrp: exit
[DT] nau_rpv: Version received for 32-bit Windows: Version 10.2.0.2.0 - UNKNOWN
[DT] nau_rpv: Connection version for 32-bit Windows: Version 10.2.0.2.0 - UNKNOWN
[DT] nau_rpv: adapter version communication is supported by other process
[DT] nau_rpv: exit
[DT] nau_cga: entry
[DT] nacomrp: entry
[DT] nacomrp: exit
[DT] nacomrp: entry
[DT] nacomrp: exit
[DT] nacomrp: entry
[DT] nacomrp: exit
.
.
It continues on next msg
Thanks alot.
Onur