According to ADXSTUDIO, you need Active Directory when deploying ADXSTUDIO 2006, even if using ADAM. Fortunately, that doesn't seem to be ENTIRELY the case.

We've successfully deployed a site using the IUSR account using a local account and still managed to deploy a site fine using ADAM - to a point. Critically, the server is on a Workgroup.

Only problem is the document access and web permissions editors in the administration console. They don't like it :)

We'll be seeing if we can crack that nut next!