I was starting to write some demos on how to host WCF in SharePoint, and ran into some odd problems. I kept getting a System.ArgumentException, pointing to a parameter called "virtualPath". I fought it only for a little while and decided to see if anyone had hit the same issue. Turns out Sahil Malik did and wrote a great blog series on how to host WCF in SharePoint.
To host WCF in SharePoint:
1. Create a WCF Home. This is the virtual directory that will host all your WCF endpoints.
2. Create a WCF Service Library, and throw it in the GAC.
3. Create a relevant .svc file in the WCF home you created in step #1.
4. Write a WCF Virtual Path Provider, and register it in the SharePoint site.