I experienced the same problem. When I tried to connect to SSIS from the client tools, my only choice is the Windows Authentication. However, my loginID is my local account on the client side. I cannot change it. It seems that I cannot connect to SSIS on my target server unless I login the target server and start from there.
I doubt that SSIS can be used to connect SSIS only on local machine. I will be pretty much interested in any approach to connect to SSIS from the client tools.