By default IIS is not enabled in the stadard vista install. It therefore first needs to be turned on.
The following link provides a short cut to the MS knowledge base article on setting up Vista IIS or web application folders:
For the sake of completeness here is the link for 2003 server:
Also the following article may be of assistance:
Trouble shooting these permissions can be greatly simplified by using the Process Monitor (Sysinternals) available here:
There is also a good article on its use here:
The folowing article expains access control:
If you get a 401.3 error when you try to browse the new site through IIS then: