I wrote a windows service a few months ago that would ping a Sharepoint list using _vti_bin/lists.asmx function GetListItemChanges. It was working fine until a few weeks ago when my company upgraded our Sharepoint instance to SP1.
Now whenever my service attempts to access Sharepoint I receive an 401.1 authentication error:

Error:

You are not authorized to view this page
You do not have permission to view this directory or page using the credentials that you supplied.
Please try the following: Contact the Web site administrator if you believe you should be able to view this directory or page.
HTTP Error 401.1 - Unauthorized: Access is denied due to invalid credentials.
Internet Information Services (IIS)

I have checked and my privileges on the site have not changed. here is the code In which I call the list:

Lists listsService = new Lists();
listsService.Credentials = new NetworkCredential("UserName", "Password", "domain");
Result = listsService.GetListItemChanges("List name", null, dTime.ToString(), null);

It has also been brought to my attention that basic authentication may have been disabled on our farm. I don't believe I'm using that but I may be mistaken.