SvcUtil and Add Service Reference Problem with Wcf Vs2008

I am learning wcf and have a simple service I am trying to host on IIs 7
with Windows authentication.
 
When I try adding a service reference in a client web  program it is appears
to me that the web config of the client does not get modified with all the
necessary code, as I get an address property on the  channel is null  error.
 
If I try using svcutil I get an error that the http request is anonymous and
returns 401 because my service is set for windows authentication.
 
If I remove the windows authentication requirement, I get an Http 404 not
found.
 
I am running on an administrative account, however not the named
administrator account.
 
Any thoughts would be appreciated.
 
Here is the system.serviceModel of the web config of the service:
 
<system.serviceModel>
    <serviceHostingEnvironment aspNetCompatibilityEnabled="true"/>
 
    <diagnostics wmiProviderEnabled="true">
         <messageLogging logEntireMessage="true"
logMessagesAtServiceLevel="true" logMessagesAtTransportLevel="true"
maxMessagesToLog="300" />
     </diagnostics>
     <bindings>
      <webHttpBinding>
            <binding name="varkBinding">
            <!--<security mode="TransportCredentialOnly">
            <transport clientCredentialType="Windows" />
           
          </security>-->
         
        </binding>
       
      </webHttpBinding>
     
    </bindings>
 
    <services>
       <service behaviorConfiguration="WcfService1Behavior"
name="WcfService1.Service1">
          <endpoint address="http://localhost:80/WcfService1"
behaviorConfiguration="MainEndpointBehavior" binding="webHttpBinding"
bindingConfiguration="varkBinding" name="Service1Endpoint"
bindingName="Service1BindName" contract="WcfService1.IService1">
            
             <!--<identity>
                <dns value="localhost" />
             </identity>-->
          </endpoint>
         <endpoint address="mex" binding="webHttpBinding"
bindingConfiguration="varkBinding" contract="IMetadataExchange" />
          
       </service>
    </services>
                        <behaviors>
      <endpointBehaviors>
 
        <behavior name="MainEndpointBehavior">
 
          <webHttp />
 
        </behavior>
 
      </endpointBehaviors>
 
      <serviceBehaviors>
                                                <behavior
name="WcfService1Behavior">
                                                            <!-- To avoid
disclosing metadata information, set the value below to false and remove the
metadata endpoint above before deployment -->
                                                            <serviceMetadata
httpGetEnabled="true" />
                                                            <!-- To receive
exception details in faults for debugging purposes, set the value below to
true.  Set to false before deployment to avoid disclosing exception
information -->
                                                            <serviceDebug
includeExceptionDetailInFaults="false" />
                                                </behavior>
                                    </serviceBehaviors>
                        </behaviors>
            </system.serviceModel>
 
 
 
 
Here is the system.serviceModel of the client web.config after the service
reference is added:
 
            <bindings>
   <customBinding>
    <binding name="Service1Endpoint">
     <textMessageEncoding maxReadPoolSize="64" maxWritePoolSize="16"
      messageVersion="Soap12" writeEncoding="utf-8">
      <readerQuotas maxDepth="32" maxStringContentLength="8192"
maxArrayLength="16384"
       maxBytesPerRead="4096" maxNameTableCharCount="16384" />
     </textMessageEncoding>
    </binding>
   </customBinding>
  </bindings>
                        <client>
   <endpoint binding="customBinding" bindingConfiguration="Service1Endpoint"
    contract="ServiceReference1.WcfService1" name="Service1Endpoint" />
  </client>
    
            </system.serviceModel>
 
 
 

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