Here is the step you need to do in order to config your SharePoint site using form authentication.
Preparation: You should have a existing ASP.net 2.0 membership database. Here is the link about how to create this database.
There is a existing user testAdmin already created in the membership database.
SQLConnectString in web.config:
<connectionStrings>
<add name="ApplicationServices" connectionString="Data Source=localhost;User ID=sqluser;Password=Password1;persist security info=False;initial catalog=DemoUser;" providerName="System.Data.SqlClient" />
</connectionStrings>
Membership Configuration Section in web.config:
<membership>
<providers>
<clear/>
<add name="AspNetSqlMembershipProvider" type="System.Web.Security.SqlMembershipProvider" connectionStringName="ApplicationServices"
enablePasswordRetrieval="false" enablePasswordReset="true" requiresQuestionAndAnswer="false" requiresUniqueEmail="false"
maxInvalidPasswordAttempts="5" minRequiredPasswordLength="6" minRequiredNonalphanumericCharacters="0" passwordAttemptWindow="10"
applicationName="/" />
</providers>
</membership>
Step 1. Create a web application and a site collection.
1. Open the SharePoint Central Administration site.
2. Click Application Management tab.
3. Click Create or extend Web application
4. Click Create a new Web Application
5. In the Port textbox, put the port number you want. I am going to use Port 112 in this example.
6. Under "Allow anonymous", Click "Yes".
7. Click Ok.
8. After you get the information says the web application has been successfully create. Click the "Create Site Collection". I am going to create a publishing portal in this example.
9. Enter the site title. For site template, select the "Publishing Portal" under the Publishing tab.
10. Click Ok.
Step 2.
1. Open the site we just create. In this example it will be http://localhost:112.
2. Click the "Enable anonymous access" link in my front page.

3. Click "Entire Web Site".

Step 3. Change the SharePoint authentication method
1. Open the SharePoint Central Administration Site.
2. Click the "Application Management" Tab.
3. Click the "Authentication Providers" under the "Application Security" section.

4. Confirm the web application you want to modify is correct. In this case http://localhost:112
5. Click the Default
6. Change the Authentication Type to "Forms"
7. Set the Membership Provider Name to "AspNetSqlMembershipProvider"
8. Set the Role Manager Name to "AspNetSqlRoleProvider"

9. Click Save.
Step 4 This is step is optional. You only need to do this if you want to set users from your membership database as your site collection administrators.
1. Open the web.config file for your Central Administration. The file is located in "C:\Inetpub\wwwroot\wss\VirtualDirectories\PortNumber" - PortNumber is the port number for your Central Administration site.
2. Add the SQLConnectString and Membership Configuration Section in the web.config.
3. Save and close your web.config file.
4. Open the SharePoint Central Administration Site.
5. Click the "Application Management" Tab.
6. Click "Site Collection Administrators" under the "SharePoint Site Management" Section.
7. Confirm the site collection you want to modify is correct. In this case http://localhost:112
8. For primary site collection administrator type "test" and verify user. It may take a few seconds, but the page should underline the text in the textbox indicating that the username is valid.
9. Click Ok.
Now if you open the SharePoint site, you should able to see a "Sign In" link at the top of you screen.

Click that link you will able to see your login screen.

Then the screen should look like this. If you configure the step 4, you should be able to see the "Site Actions" menus as well.

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