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I too had to do some fiddling and manually created and moved the hiddent .htpasswd file to the appropriate place. Works great.

I'll also add that I was able to determine that my issues with syncing in my office was due to an office configuration. Our network was purposely set up to prevent computers from seeing each other. However, we also have a parallel "public" network (public but actually secure) that does allow devices to see one another. When I switched my wireless connection to that that network, all was good.

Syncing now work at home and in office.

As a caveat, however, I'd still like to be able to make this work on box.net so I don't have to always been on the same network as my local Webserver. I figure that may come with some. So I'm happy for now.