Earlier this week I introduced a generic WCF wrapper for the Dynamics CRM Organization Service that I call the Diesel Xrm Service Wrapper, and I explained how to use it, but I didn't go into detail about how its best feature - authentication using Dynamics CRM credentials - works. Since then, I've posted an item on the HP Enterprise Services Application Services blog with more details.
Enterprise Microsoft Dynamics CRM implementations frequently require developing custom Windows Communication Foundation (WCF) web services to be used for integration with external systems. Typical use cases for custom web services would include situations in which a consuming system can't easily access the Dynamics CRM Organization Service, or a custom service is required to do some data processing above and beyond the capabilities of the CRM Organization Service. Because these custom web services are separate from the actual Dynamics CRM system, user authentication and authorization has to be handled via a separate mechanism.
Click here to read more of my article, "Custom WCF service authentication using Microsoft Dynamics CRM credentials."