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Dynamics Nav 2013 setup question about FQDN

I am in the process of testing DynamicsNav 2013, for go-live roll out in about a week.

I am at the point of testing the Jet Essential Connection to the new Nav RTC and have hit a wall.

I have successfully configured the Data Source Settings using the IP address of the Dynamics Nav RTC server/instance.. However I continue to get a 401-unauthorized error when using the FQDN (fully qualified domain name).

At first this appeared to be a DNS issue, however DNS settings are correct and I can get to the data source from IE by using http://dynamics_RTC_servername:7047/DynamicsInstanceName/WS/systemservice at which point a username/password dialog pops up and entering the username/password I am using on the test server takes me to the default XML code as it should.

So I am guessing there is something in IIS that is causing this issue, does anyone have a clue what it might be?

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