Guys don’t forget, IIS7 uses a Web.config file in place of the .htaccess. A quick fix for most 500 errors is to delete the Web.config, restart the site, and try again.
This will behave in the same fashion as .htaccess. I use WPMU and soon to be WP3.0 in a W2k8R2 environment, this almost always does the trick.
