You can impement SSO at coockies and domain level. You will need Forms Authentication Ticket and Cookies to make susccessful SSO like below.
FormsAuthentication.SetAuthCookie(txtUserName.Text, false);
System.Web.HttpCookie MyCookie =
System.Web.Security.FormsAuthentication.GetAuthCookie(User.Identity.Name.ToString(),
false);
MyCookie.Domain = “mysite.com”;
Response.AppendCookie(MyCookie);
In ASP .NET configuration file (web.config) there is an element inside <system.web> element named <machineKey> which Configures keys to use for encryption and decryption of Forms authentication cookie data and view-state data and for verification of out-of-process session state identification. In the web.config of both projects, change the authentication node to this:
<authentication mode="Forms">
<forms name="SampleAuth"
loginUrl="/TestWebApp2/Test.aspx"
slidingExpiration="true">
</forms>
</authentication>
Change the loginUrl to be that of your login page. Then change the
authorization node in the web.config to be this:
<authorization>
<deny users="?" />
</authorization>
In your login page, when you've authenticated the user, do this:
System.Web.Security.FormsAuthentication.RedirectFr omLoginPage("Andy", true);
Now, in your other applications (Webapp2 for example), you can get at the
username ("Andy" in this case), by using:
System.Web.HttpContext.Current.User.Identity.Name
I'd recommend reading up on forms authentication and security.
You can find complete example at http://www.codeproject.com/KB/aspnet/SingleSignon.aspx and http://aspalliance.com/1545_Understanding_Single_SignOn_in_ASPNET_20.all
Also read http://blah.winsmarts.com/2006/05/19/aspnet-20-implementing-single-sign-on-sso-with-membership-api.aspx and http://bytes.com/topic/asp-net/answers/343134-single-sign-transfer-credential-between-webapps