Not everyone has a UNIX environment available  and ready to go.  I spent some time trying to figure it out.  There is a really simple solution from Microsoft and the manual way is not too bad either.

Installer Package
The easiest way to install the following package from Microsoft. http://www.microsoft.com/web/gallery/WordPress.aspx

This will install, MYSQL, PHP, IIS7 Rewrite module, and  version of the  WordPress files.

Manual Setup

1. Install the following (latest versions of all)
- PHP (select fast CGI option)
- MySQL
- IIS7 Rewrite Module (http://www.iis.net/expand/URLRewrite)
- Word Press (download lates files, unzip in location for website)

2. Configure PHP.ini file
- Set display_errors = On
- Set SMTP =YOUR SMTP SERVER

3. IIS7
- Make sure CGI is enabled
- Add/Replace web.config file to root of web site.  This will handle the routing for permalinks(friendly URLs) with this configuration.

<?xml version=”1.0″ encoding=”UTF-8″?>
<configuration>
<system.webServer>
<rewrite>
<rules>
<clear />
<rule name=”uploads” stopProcessing=”true”>
<match url=”\wp-content\.*” />
<conditions logicalGrouping=”MatchAll” />
</rule>
<rule name=”wordpress” patternSyntax=”Wildcard”>
<match url=”*” />
<conditions logicalGrouping=”MatchAll”>
<add input=”{REQUEST_FILENAME}” matchType=”IsFile” negate=”true” />
<add input=”{REQUEST_FILENAME}” matchType=”IsDirectory” negate=”true” />
</conditions>
<action type=”Rewrite” url=”index.php” />
</rule>
</rules>
</rewrite>
</system.webServer>
</configuration>

4. MySQL
- Create new DB
- Create username/passwords for DB

5. WordPress
- Rename the wp-config-sample.php file to wp-config.php
- Update db connection info
- Browse to /wp-admin/install.php and follow instructions