I don't know the exact process for IIS7, but I can tell you how to do it from IIS6, hoping that things haven't changed all that drastically.
- Create a new Web site within Internet Information Services Manager. I'm going to assume this is still as easy as going to Action -> New -> Web site.
- When prompted for an IP address, port, and host header to use for the site (in IIS6 this is the second dialog, after setting the site description), enter the new domain name under the "Host header for this Web site" field. Leave "port" set to 80, and only adjust the IP address from its default value if you know that you need to change it.
- The next dialog should let you specify where on your disk or network the site's files should be stored. Ideally this will be a separate directory for every single Web site. If possible do not create the new site's directory as a subdirectory of any other site: while IIS will do it, this usually screws up other services like ASP and ASP.NET.
Then all you should need to do is set your directory permissions (you most likely only want "Read"), which occurs in the next dialog. After that, your site should appear in IIS Manager and start automatically, at which point you can manipulate it like any other site.
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