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When navigating though an ArcMap Service in HTML Viewer, the text of an acetate layer becomes illegible.
If the ArcMap data frame has a reference scale set, the TextMarkerSymbol acetate layer will scale when navigating through an ArcMap Service. Therefore, the size of the text changes making it illegible.
There is no workaround for this other than removing the reference scale from the ArcMap document and then refreshing the ArcMap Service.
This issue has been fixed in ArcIMS version 4.0.1.