logon failure: unkown username or bad password

i have 3 systems
1) web server 
in its webconfig file i have
<identity impersonate="true" userName="webserverloginname" password="webserverpassword" />
using this it wrks fine in my local production server
2)database server
username1= username of the system
password1 = passowrd of the system
username2= username of the the database
password2 = passowrd of the database
3) client system which access the database server aswell as web server
 
<identity impersonate="true" userName="username2" password="password2" />
if i use the above i get the error
Could not create Windows user token from the credentials specified in the config file. Error from the operating system 'Logon failure: unknown user name or bad password.
 
even if i use the syetem name ...