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I am following the instructions exactly from the IIS site http://learn.iis.net/page.aspx/387/using-visual-studio-2008-with-iis-7/

But when I do the "2. In Visual Studio, use the Build \ Publish option to publish the contents of your Web application to an IIS 7 Web site. " step I get the following error.

 ------ Publish started: Project: MvcApplication5, Configuration: Debug Any CPU ------
 Connecting to http://localhost/...
 Unable to create the Web site 'http://localhost/'.  The Web server 'http://localhost'    could not be found.
 ========== Build: 1 succeeded or up-to-date, 0 failed, 0 skipped ==========
 ========== Publish: 0 succeeded, 1 failed, 0 skipped ==========

I also tried setting up the IIS side first and opening the website from there but get a "can't find localhost error when I try to open the website via the Local IIS option in the open site dialog.

Finally I tried Use local IIs server option and to clet VS create virtual directory and get: "Unable to create the virtual directory. Could not find 'http://localhost' on the local machine.

Firewalls are off and IIS are activated in Add components checkbox

Sites are running perfectly in IIS but not VS

What is wrong with VS2008?

Is there an alternative to Visual Studio?, I could take some time out to learn Java if there is a more stable development IDE for that.