So, in continuation of the last post, thanks to all the people who had suggestions, including the tips from Rocky's post, all of which I have done to no avail. What's worse, it's no longer a Vista and IIS issue. It seems like after running the Orcas Create Web Site or WCF templates, IIS is totally screwed. Even after setting the Target Framework for .NET 2 instead of 3.5, not only am I still unable to create a web project in Orcas but I get the same error in VS2005. And I get it on IIS6 too on Windows Server 2003 R2 and on Windows XP SP2 on two other boxes. On one I checked, and it seems like on IIS6, something reset the ASP.NET to some version of 1.1. I have uninstalled and reinstalled ASP.NET many times and now nothing works. Help! ScottGU help! In summary, I have:

1. I have installed the optional "IIS 6 Management Compatibility" option installed within IIS7
2. I launch VS 2005 with "elevated" privledges so that you have admin privledges to connect to IIS (this is needed to debug a service, as well as create sites and/or change bindings that impact the entire machine
3. I have enabled Windows authentication because it isn't enabled for the default web site in IIS - blocking the use of VS debugging until you enable it
4. I have gone into the Orcas web site's properties dialog and set its target .NET version to 2.0.
5. On the Windows Server 2003 and XP machines, the above should not apply as its IIS6 and not Vista and reinstalling ASP.NET 2 with aspnet_regiis does not work.

Does anyone have any idea? I had wanted to show Orcas and Vista for a Code Camp this Saturday as there are substantial improvements in WCF and WF but now I can't even create a web site on any machine.

Update: I should note three things:

1. I am getting help from a gentlemen at Microsoft through the kind responses of ScottGu
2. I can still use the file based Web Server (the Cassini thing) although modifying some of the WCF demos is a challenge
3. I DO usually use VPCs for this kind of thing but since it was a full beta and in a separate registry hive, and I need to do direct development without having my attached USB drive, I figured it might be ok this time