Confirmed that this same issue holds to using ArcGIS Online or ArcGIS for Organiziations. I can view and interact with arcgis online or AGOL map services pointing to server 10.1 secured services when using Firefox or Chrome. But when using IE, I still get the same error - "unable to access the authentication service" once I submit the credentials.
Since users have no control over ArcGIS Online code base, this is a confirmed issue with IE, Identity Manager, and Server 10.1 secured services. Is this a known bug that is being worked on - since IE is the primary approved browser in most large organizations, this functionality should be addressed soon. Unless I am missing something?