Instead of using Azman, you could also use Active Directory
Application Mode (ADAM). The benefit is that the ADAM instance and the web
application can live on different machines.
Requirements: Windows XP Service Pack
1 or later; Windows Server 2003 Service Pack 1.
Install ADAM from: Active
Directory Application Mode (ADAM) Download Page.
NOTE: Unfortunately, this is currently not supported on Windows Vista
The step-by-step details on how to setup ADAM are already on
the Microsoft website. I have found this to be working and I will not repeat it
here. Instead, here is the link to it: http://msdn.microsoft.com/en-us/library/ms998331.aspx