I’m new to IIS 7 (7.5 to be specific) and have just been struggling with an issue which I’d like to share the solution to – IIS 7.5 no longer uses the IUSR_machine_name account to apply write (or other) permissions to a directory. Instead you have to use IUSR.
However, if you try resolving this (with Check Names) it will try to give you something else – instead you need to open Object Types (when the Select Users or Groups window is open) and select Service Accounts, and then go to Locations and select the local computer name.
You can then apply the correct permissions and away you go. I was installing eFront when I came across this particular issue.