The different types of directory services supported by Web Server 7.0 are:
LDAP — Stores user and group information in an LDAP-based directory server.
Key File — A key file is a text file that contains the user’s password in a hashed format, and the list of groups to which the user belongs. The users and groups stored in a key file are used for authorization and authentication by the file realm alone; these bear no relationship to system users and groups.
The key file format can only be used when the intent is to use HTTP Basic authentication.
Digest File — Stores user and group information based on encrypted username and password.
The digest file format is meant to support using HTTP Digest authentication. It does, however, also support Basic authentication, so it can be used for both authentication methods.
If you want to set up distributed administration, the default directory service must be an LDAP-based directory service.