OK, I figured it out. You have to (as the documentation indicates) have load all the DNN stuff to a regular directory on disk, then in IIS create a virtual directory pointed to the DNN website folder. So far, so good. That's not much different than how I had previously set it up, which was to have the DBB website code actually live in an IIS application under Inetpub\wwwroot. The difference is, for a portal to be functional - i.e., you can login to it, you have to first create a virtual directory (normally directly under Inetpub\wwwroot) having the same alias as the portal alias set up in DNN, but the new virtual directory actually just points to the same DNN directory on disk. Then in order to actually login to the portal, the URL has to consist of both the virtual directory AND "Login.aspx" (which doesn't actually exist, by the way).

So, if DNN is installed in C:\DotNetNuke, and you have an IIS virtual directory called "DotNetNuke" pointing to C:\DotNetNuke\Website, then the host should be set up correctly to work. Then if your portal site is called "MySite", then if you're running this all on your local machine (like me), and within DNN you have a portal defined with an alias of "localhost/MySite", then you should have an IIS virtual directory configured pointing at C:\DotNetNuke, and in order to login to that portal, you have to browse to "http://localhost/MySite/Login.aspx". Everything's working great now!

Later!