VB.NET web applications accessing PostgresSql through ODBC

I've just started working with PostgresSQL. Currently, we are using version 8.2 on a Windows XP platform for both the
PostgresDB and all other application files. 

I am trying to estabish a connection to the database using ODBC (PostgreSQL Unicode driver 8.02.02.00) within a VB.Net
application.When I make the connection as a desktop application, I am able to successfully access the database.
However,when I attempt to make the connection through a VB.Net web application, I am getting the following error:  

ERROR [28000] Communication error during authentication; Error while reading from the socket.

I've tried using both direct ODBC functions and ADO objects, with similar problems (i.e. it functions in a desktop
environment,but not through a web environment). An example of my code to access the database is as follows: 

        Dim szConnect As String = "DSN=mydsnname;UID=myuid;PWD=******"
        Dim cnDB As New Odbc.OdbcConnection(szConnect)
        cnDB.Open()    ' <--- this is where the code fails
        Dim dsDB As New DataSet
        Dim adDB As New Odbc.OdbcDataAdapter
        Dim cbDB As New Odbc.OdbcCommandBuilder(adDB)
        adDB.SelectCommand = New Odbc.OdbcCommand("Select * from mytable", cnDB)
        adDB.Fill(dsDB)

Any idea why the failure occurs when doing web applications? Is there some set of permissions I have to give to the web
serverprocess or some other code in order to give it permission to run ODBC applications?