Being the good dogfooder I am, I'm running Vista in x64 mode. My current project involves moving over an existing web service to the new machine.
As part of this, I've installed all the latest internal VS2005 goodies relating to service packs and Vista update. Still, it's not been a seamless process. In a nutshell, several things still need to be manually enabled on the Vista box, and the VS setup doesn't appear to help or warn about this. (At least not yet.)
After much searching, this page seemed to be the most useful: http://msdn2.microsoft.com/en-US/library/aa964620(vs.80).aspx
In addition, I ran into permissions problems with my web.config file. It turns out that when I created the web service on the original machine, the SYSTEM and USER group had appropriate permissions to the app directory. When I recompiled and tried to re-run on the new machine, those permissions weren't in place, so IIS complained. After adding the right permissions to the folder on the new machine, things started working.
I'm still not an expert on getting IIS 7 to work, but figured I'd post my experiences here to potentially save some other folks the frustration.
All the above still wasn't enough to get debugging working. I also learned that in IIS 7, Integrated Windows authentication isn't installed by default. As such, you'll need to go to the Add/Remove programs | "Turn Windows Features on or off".
Then, drill down to "Internet Information Services" | "World Wide Web" services" | Security | "Windows Authentication"
Finally, make sure "Windows Authentication" is checked, and let Windows do its install voodoo.
After this completes, bring up the the IIS Manager, go to "Authentication" in the IIS group. You should see "Windows Authentication" has been added to the list. Make sure to enable it, as the default seems to be disabled.