SQL Connections.NET Integrated security Hosting Multiple Applications on Single IIS

Hi there,
We are working on setting up a shared hosting environment for
intranet/internet use.
Multiple Load Balanced servers to host .NET applications in both C#.NET and
VB.NET.
Most of the applications were delivered to us with instructions to use sql
passwords but we would like to move to an intergrated security model so that
passwords are not left out in the open in web config files as there are
different teams working on the Server OS than the webapplication.

Would there be any reason to believe that switching to an integrated
authentication model in the connection string may cause problems? None of
the hosted applications are intended to be high performance. Security is
much more a concern than an improvement in app performance for the 50 users
that are going to be using any one of EsotericAppB,C through X.

We have successfully set up our tests and all looks well. I'm just wanting
to check in with the comunity for feedback before we go live. I'd rather not
deal with encrypting passwords in the config file.

Thanks!
-Rex
DBA.