Hosting WCF services under IIS 7.0 in Windows Vista can be a complete nightmare, at least if you're not aware of some of the pittfalls that you might run into. I tried hosting a simple svc file an got a HTTP–500 error showing me I the following error: svc-Integrated has a bad module "ManagedPipelineHandler".
At first when I did a search on google I found out that there's a problem with the integrated .NET pipeline of IIS 7.0 and switching over to the classic version should solve it. I switched and got exactly the same error. However another problem I had with ScriptResource.axd not being activated was solved ;P so this is something to think of when I run into trouble again.
As it turns out I forgot to to turn on HTTP activation of WCF services under windows features. Kinda weird when you think about it, I expected it to be listed under IIS 7.0 in the windows features dialog, but it was listed under .NET 3.0. Ooh well, at least it was quick to find 🙂
A rather more precise tutorial can be found here: http://blogs.msdn.com/jaimer/archive/2006/12/05/running-a-windows-communication-foundation-wcf-indigo-service-in-windows-vista.aspx