I have configured and installed IIS many times on stand alone Windows 7 64 bit machines without any issues. I just bought a 27" Imac and running Windows 7 64bit Ultimate in Parallels Desktop 7 under OS X Lion. I installed IIS and configured everything correctly and IIS shows it is running. The problem is when I try to access the web server on a local desktop using http://localhost I get HTTP 500 internal server error. I use the web server for web developing purpose only. Are there any other settings in Parallel Desktop that I have to configure to get IIS to work?
Because as far as Mac OS X is concerned, the web server isn't running on localhost/127.0.0.1. A virtual machine/guest as its own ip adress different from the host machine. The server is running in virtual, separated, machine and that virtual machine as a IP, this IP can be either on subnetwork (Shared, in the VM network configuration) or on the same network (Bridge). For something like this is probably better you use bridge networking, please review the PDM User Guide on how to operate network setting for VMs.
I am not using a browser in OSX to access IIS web server. I am using IE under Windows 7 to access the local-host. I am not sure if that will make a difference or not.
There seems to be some confusion here, maybe mine. Are you trying to access the web server from the same vm that is running it or from another vm? If it's the same vm than http://localhost or http://127.0.0.1 should work. If it's a different vm, what I said for OSX also applies here. But since it gives 500 internal server error, I'm guessing it's the same vm after all, and in fact means it manages to connect but the server fails for some reason. I can't see how Parallels would have anything to do with this, this is likely a problem with the web server/windows configuration.