One of the new features in MOSS 2007 is Custom Forms Authentication. SharePoint 2007 (Microsoft Office SharePoint Server 2007 or MOSS 2007) is already being deployed in hosted environments in extranet and internet roles. In either role, when dealing with authenticating users combined with hosting multiple companies on a single platform, you must consider MOSS’s architecture for authentication. The Solution here highlights how Forms Authentication is enabled in Microsoft Office SharePoint Server 2007.
Steps to enable forms authentication can be seen the following link which i followed:
http://www.codeproject.com/KB/sharepoint/moss_enableforms.aspx and also you can watch Office Developers Screencast video which can be downloaded on the net.
I found that not only in the above link but also when i went through some of the blogs for enabling forms authentication some of the important steps missed. The following steps i found important when i was facing problem implementing forms authentication.
When ever you create a new sharepoint web application its home directory should be set to “SharePoint central administration application pool” this is very important.
One more important thing we need to checkout is whether the user whom we specified during creating application is present under Security->Users.If the user is not there then you will be able to login using forms authentication and also users are not visible in groups and permissions options in central administration.