Using IIS7 with Visual Studio 2005 & Visual Studio 2008
Mike Volodarsky on the IIS team just published some very useful articles describing how to setup and configure IIS7 to properly work with Visual Studio 2008 and Visual Studio 2005.
The article covers necessary components needing to be installed, and the required configuration needed to create, edit and debug web applications using IIS7 and Visual Studio.
For Visual Studio and Visual Web Developer users using IIS7, or wanting to use IIS7, I highly recommend taking a look:
Omar Khan | Product Unit Manager | Visual Web Developer