Finally got around to getting a install of Windows 7 on my MacBook Pro and of course the first thing I install is Visual Studio 2008 and IIS 7.  If you choose the default options, this is the message you get when selecting local IIS in the open or create web projects.

You must be a member of the Administrators group on the local computer to access the IIS metabase. Therefore, you cannot create or open a local IIS Web site. If you have Read, Write, and Modify permissions for the folder where the files are located, you can create a file system Web site that points to the folder in order to edit the files.

Initially I’m thinking this is the user rights thats blocking me from accessing the metabase.  So I try to run VS2008 as “Run as administrator”, but I get same error message.

I then remembered an IIS 6 option under the Windows Features install dialog under Internet Information Services and found the following option that allows VS 2008 to play with IIS 7, “IIS Metabase and IIS 6 configuration compatibility”.  Here are the steps:

1. Open Control Panel
2. Open Programs
3. Open Windows Features
4. Expand Internet Information Services
5. Expand Web Management Tools
6. Expand IIS 6 Management Compatibility
7. Check IIS Metabase and IIS 6 configuration compatibility
8. Click OK

Good luck.