I just wanted to make a note of this for future reference and to help any one that might be struggling with this in the future:
I have just created a simple Excel 2007 office add-in and I wanted to deploy it to a local server on my intranet and allow other users to click a url and install the application. Using the project properties page I configured the relevant server details and successfully published the add-on on to the server.
But when I navigated to the specified install url I received 403 error This website requires you to login. After searching the web for a suitable answer I finally stumbled upon the answer on this web site:
In summary, don't forget to configure the .'vsto' MIME type with 'application/x-ms-vsto' on the virtual directory containing the add-in.