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The question is in the title.

Does an internal site need to have https security?

For example we have an internal site that handles our client's license keys -- do we need for that to be secure since it is on out internal network?
(The website is secured with IIS and windows user validation)

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Whenever you use windows passwords to logon you should also use SSL. (This is more vital if you allow basic auth) This is to avoid privilege escalation both for your own users and as a multilayered security strategy.

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100% agree. We have a WordPress installation on our intranet which authenticates against Active Directory, so it's protected with SSL. – Nic Nov 5 '11 at 19:38

If the content on your network is sensitive and there are users who do not have the privileges required to view some or all of that content then you will want to use SSL on your intranet. Fortunately setting up SSL on your Intranet isn't difficult and you can use a self signed certificate since there is no need to verify your company's identy.

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The website is secured with IIS and windows user validation (but no https) – Neal Jun 23 '11 at 15:23
That will limit who can get into the network but won't prevent packet sniffing on the network. – John Conde Jun 23 '11 at 15:38
but the only people who can get to the network is people who have direct access to our wired network – Neal Jun 23 '11 at 15:42
@Neal, Just because the users may have a higher level of trust versus users of a public facing website doesn't mean sensitive content shouldn't be protected as much as possible. Lots of hacking and theft occur from within a company's own walls, virtual or real. – John Conde Jun 23 '11 at 15:47

If you have open wireless access for your visitors on the same network, and it's not served over https then it's easy for visitors to intercept other people's network traffic to your intranet.

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