Failure Writing Properties Running SSIS Package From A Web Service

I am attempting to run an SSIS package from a web service. Right now both the service and package are on my local machine which is running XP. I have accessed the web service from a client application in debug mode. I am not sure if it is actually running under aspnet_wp.exe because it is XP and a development environment? (separate question)??? The package fails with a series of OnError messages similar to:

The result of the expression ""/c DEL /F /Q "" + @DeployFolder + "\catalog.diff.lz""" on property "Arguments" cannot be written to the property. The expression was evaluated, but cannot be set on the property.

An initial supposition is that the permissions of the web service are inadequate for the package. I have the authentication as "Windows" and <identity impersonate="true" /> in the Web.Config file. When I break in the debugger the Environment.UserName and Environment.UserDomainName are mine and I am an Admin on the box.
the authorization is 'deny users="?".

The article that describes basic implementation of this in a Web Service states:

With its default settings for authentication and authorization, a Web
service generally does not have sufficient permissions to access SQL
Server or the file system to load and execute packages. You may have to
assign appropriate permissions to the Web service by configuring its
authentication and authorization settings in the web.config
file and assigning database and file system permissions as appropriate.
A complete discussion of Web, database, and file system permissions is
beyond the scope of this topic.

And how!

Note that the load is fine and that this is a run time error and that the package runs correctly when run manually from SQL Server using the 'run package' menu item in the Object Explorer tree of the SQL Server Management Console.

I need to know if this is an ASP.NET issue per se or XP or if this is even a security issue. And how to solve it! This is critical path so an expeditious reply with a solution would be greatly appreciated.