Back in the days before Visual Studio Web Server we would host our local dev inside IIS. If you have a workstation version of IIS that means only 1 website. What if you are working on several websites. Easy: create them in VDIRs, e.g. http://localhost/ProjectA, http://localhost/ProjectB.
Living in a VDIR doesn't sound so hard. Make sure all your images/CSS/links are relative paths, use the "~" a lot. Sounds like a good practise. Hardcoding images etc so they only work when the application is served from "/" sounds like a bad practise.
There are some nuances anywhere you have to build a link (mostly not common scenarios):
- eg; PROD: http://prodserver.com/images/up.jpg -> DEV: http://localhost/ProjectA/images/up.jpg
- links / images in emails
- flash/javascript/silverlight requests data from the server which contains links to images
- The full link to the a PayPal IPN (the page paypal POSTs their response too)
So.. Are you doing this? Advantages / disadvantages? Any other gotchas I've missed?