We were working on making one of add-ons CRM Live compatible. During development all worked well. However on a test environment it was unable to instantiate the logon manager object.
After checking around a lot and playing around with a lot of settings on the server we found that the issue was with the AppPool under which the website was being run. The identity of the AppPool was Network Service as usual, we changed that to run under Local System and voila it worked!!!
So the prerequisites to get the application designed for CRM Live working would be:
1. have the “msidcrl40.dll (IDCRL Dynamic Link Library)” present in your System32 folder.
2. Make sure that the website is running under an AppPool identity that has permissions to access the msidcrl.dll
This solved our problem and we were able to login to the Live account of CRM from aspx page.
We are not sure about the security and stability aspect of this and we just posted this as it happened to solve our problem immediately. More in this later as and when we research and get feedback.