Sharepoint Webservice 401 error

I'm trying to call sharepoint webservices in C# console application. The code works fine when I use my local system's WSS as target application but don't work with another server accessible over the web. Following is my code.

Webs service = new Webs();
            service.PreAuthenticate = true;
            service.Credentials = new System.Net.NetworkCredential(login, password);
            //service.Credentials = System.Net.CredentialCache.DefaultNetworkCredentials;

            service.Url = url + @"/_vti_bin/webs.asmx";

            XmlNode sites = null;

            try
            {
                sites = service.GetWebCollection();
            }
            catch (Exception ex)
            {
                return;
            }

Points to note: 1. It neither work with DefaultNetworkCredentials nor with my domain user credentials. 2. The webservice end point if pasted in a browser successfully list the web service methods. 3. I get 401 unauthorized error in all cases(accessing the remote server).

Am I missing something?

Use a tool like Fiddler to capture the http traffic between console app and SharePoint. That will help debug what your problem is.