[a] in XP if no security tab appears on right clicking 'sharing and security' in Windows Explorer, use Tools/Folder Options to switch off simple file sharing. Then you need to set ASP.NET access to all files in the site.

[b] if ASP.NET 4.0 is installed, VS complains about version to use, leaving ASP.NET version in an uncertain state. Need to leave everything as version 2

[c] If you install IIS after .Net 2.0 Framework, as I did, the rights of asp.net user has not been set correctly.

Resolution:-

Run the following from your command line to reset IIS registry settings for aspnet user.

~\WINDOWS\Microsoft.Net\Framework\v2.0.50727>aspnet_regiis -i

then
~\WINDOWS\Microsoft.Net\Framework\v2.0.50727>aspnet_regiis -ga aspnet

[d] On DNN auto install, if unable to have email accepted, use custom install and don't touch the email addresses proposed. Or, try a different SMTP port eg mailserver:587

JC