Impersonation (running code as the invoking user) under WCF is configured slightly differently to ASMX services. You need to first of all tell your binding to use windows authentication to identify the caller as follows;
However, impersonation wise this won't do a thing - when your service code attempts to do something like write to the file system, it will do this as the user your worker processes are configured to use (normally ASPNET or NETWORK SERVICE).
Normally in ASMX you'd configure impersonation using web.config's <identity impersonate="true"/>, but WCF appears to ignore this. Instead you're individual methods in WCF need to be marked up by adding the following attribute onto the method;
When you consume the service on the client just add this code;
The service will now impersonate the calling client user.