The Solution? smile

On a domain with an underscore, IE silently drops all cookies for that host and refuses to accept new ones.
The server sends Set-Cookie response correctly, yet the cookie never shows up in IE.
SOURCE: http://www.alexrothenberg.com/2010/09/24/use-dashes-not-underscores-in-your.html

I've also read about this happening with domain names that start with a numeric digit.
Ex: "1world dot com" and "2friends dot com"

Basically, IE has problems accepting cookies from subdomains that don't follow the URI RFC
SOURCE: http://www.ietf.org/rfc/rfc2396.txt

EDIT: From most of what I've found, its IE7 and older versions. The bug may also appear in more recent versions, but I haven't researched the issue in great detail.


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