Basic authentication when calling a web service

Question

I am attempting to call a web service using ActionScript. The
web service provider requires that I use HTTP Basic Authentication
to communicate my SOAP requests. I cannot seem to get this done in
ActionScript. If I instantiate a WebService object and call its
SetCredentials method, I get an error "Authentication not supported
on DirectHTTPChannel (no proxy)". I have the WebService object's
useProxy property set to true. HELP!

Answer 1

I know this is five years later on this forum but there's no solution here or on any other forum.  So after two day's of hammering this out I was able to produce a workable solution.  Create a new user account for testing.
Wu_Xiao's explanation of the issue was dead on.  The WebService does a GET then a POST and for the GET we are unable to supply the Authorization in the header and this is why we get the popup. The POST has the Authorization but it already to late. 
Take these actions
1 Create a new user on the machine with the web services. Start with a simple name and password (text only)  I had issues with different users. Start clean and simple.
2 Copy your web services a second usable service.  You'll see in my example below i have Ive copied  ServicesSECURE/Services1.asmx?WSDL to ServicesDEFINITION/Services1.asmx?WSDL
3 Remove all of the code inside of your services making the new set of service like a definition service. Make sure all of the inputs and outputs are the same. ServicesDEFINITION will have no coding and empty returns.
Example  
[WebMethod]
        public String CountUsers(string group)
            return "";
4 Implement the code below. Call the init() right away to instantiate the web service and wait until it loads to use any of the services.  I use a button event to test.
private var testws:WebService = new WebService;
  private function init():void
  testws.wsdl="http://test.com/ServicesDEFINITION/Services1.asmx?WSDL";
  var encoder:Base64Encoder= new Base64Encoder();
  encoder.insertNewLines = false; // see below for why you need to do this
  encoder.encode("USERNAME:PASSWORD");
  testws.httpHeaders = {Authorization:" Basic " + encoder.toString()};
  testws.loadWSDL();
  testws.addEventListener("load", wsdlLoadHandler);
  protected function test_clickHandler(event:MouseEvent):void
  testws["CountUsers"].addEventListener(mx.rpc.events.FaultEvent.FAULT,testFaultHandler);
  testws["CountUsers"].addEventListener(mx.rpc.events.ResultEvent.RESULT,testResultHandler) ;
  testws.endpointURI="http://test.com/ServicesSECURE/Services1.asmx?WSDL";
  testws.getOperation("CountUsers").send("Test");
  protected function wsdlLoadHandler (event:LoadEvent) : void
  //the service has to load before using the getOperation function
  //you could try using mx.core.UIComponent.callLater from
  //this listener and call the gettestws.getOperation("Co....
So you'll see that the ServicesDEFINITION (GET) is called and grabs the definition of the Service1 service but this unsecured services is useless because we've removed all of the code.  After the definition GET is called we can change the end point using endpointURI and perform the POST against our secure ServicesSECURE.