The IIS that comes with XP is 5.0 and limits # of concurrent connections to 10 (I think- something low).
Lock Down:
For IIS development I don't think you should worry too much about security for local development as long as you trust the people on your network and you are not exposed to the internet.
But if you are really paranoid, the best method would be to lock it out against everyone besides the peron on that machine. As Odividiu said (first answer) you can set your IIS to only listen to request coming from the local machine (127.0.0.1). you can do this by:
1) start->run->%SystemRoot%\system32\inetsrv\iis.msc
2) Click the 'Default Web Site'
3) Action->Properties
4) Change 'IP Address' to '127.0.0.1 and click 'Apply'.