WordPress permalink on Windows IIS 7

Question: I have trouble installing permalinks for my WordPress project. I get an infamous Server Error 500 while running 64 bit Windows Server 2008 and IIS 7. PHP 5.3.1 and fast CGI module is installed. What to do? WordPress instructions did not work out well(http://codex.wordpress.org/Using_Permalinks). Answer: Permalinks are permanent URL-s generated to point to your individual weblog posts and pages. Other bloggers will use a permalink to point to your post from their own articles. When they are linked to an individual post, the URL is supposed to be permanent, not dynamic. Hence the name. You have probably misconfigured your Web.config file or have not installed the Rewrite Module. The Microsoft URL Rewrite Module for IIS 7.0 provides flexible rules-based rewrite engine that can be used to perform broad spectrum of URL manipulation tasks. URL Rewriting in ASP.NET: http://msdn.microsoft.com/en-us/library/ms972974.aspx Let’s suppose you have full access to the server. Download and install URL Rewriter for IIS 7.0 from Microsoft’s Website. Latest version as RC: x64 -> http://go.microsoft.com/?linkid=9684523 x86 -> http://go.microsoft.com/?linkid=9684522 Discussion about how to create rules for URL rewrite module with IIS 7: IIS.NET discussion Wordpress rule inserted into the system.webServer section of the Web.Config file:
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<!-- WORDPRESS RULE EXAMPLE -->
        <rewrite>
            <rules>
                <rule name="Wordpress Rule" stopProcessing="true">
                    <match url=".*" />
                    <conditions>
                        <add input="{REQUEST_FILENAME}" matchType="IsFile" negate="true" />
                        <add input="{REQUEST_FILENAME}" matchType="IsDirectory" negate="true" />
                    </conditions>
                    <action type="Rewrite" url="index.php/{R:0}" />
                </rule>
            </rules>
        </rewrite>