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I have been looking at IIS 7 and reading up on this. This is the next version of IIS and supposed to ship with the next version of the OS, Longhorn (Not sure if it will ship with the client edition also, or only the server edition).

Major enhancements to the HTTP pipeline means that ASP.NET is integrated much lower into the base. This means you can write the equivalents of an ISAPI filter in Managed code. IIS also now understands web.config. This means your ASP.NET and IIS share a single configuration repository, which is good news for the developers. They also share your authentication and autherization settings. Now you get real xcopy deployments for your web sites.

Also a completely new Management interface is supposed to be in the works, making it easier for you to maintain the new IIS server. Can't wait to get my hands on a Beta. :-)

You can also read about IIS 7 features at Fritz Onion's Blog