I am new to DotNetNuke. I have successfully installed the source code version 5.6.1 on my local XP machine. I have also successfully installed the source code version 5.6.1 on an old windows server 2003 box just to become more familiar with the install process. Before installing dnn on my production web server, I am wanting to install 5.6.1 on an internal web server running windows server 2008 which closely matches my production server. I have watched the free training video available, and have browsed the forums with no luck finding a  solution. My steps have been:

1) I downloaded the lastest zipped install version of 5.6.1. I open up the properties of the zip folder and unblocked.
2) I extracted the files to the desired directory on my web server  (C:\inetpub\wwwroot\dnn).
3) I opened IIS, right clicked on the current test website, and chose to add an application. I chose the default app pool, and pointed the physical path to the directory to C:\inetpub\wwwroot\dnn
4) I set up permissions on C:\inetpub\wwwrott\dnn for full control for user "IIS APPPOOL\DefaultAppPool."
5) I created my database in SQL server 2005, and created a login just as is outlined in the training video.
6) I open a browser and try to hit my internal test site "http://testsite.com/dnn" which gives me the "500 - internal server error"

I am not sure what I am missing, I am not sure if I am overlooking a step in the process. I made sure that my defaultAppPool is using .net 2.0, and that the identity is "ApplicationPoolIdentity." Any help or guidance would be much appreciated. Much thanks in advance.

Thanks for the quick reply.

I verified in the Server Manager/Features that .Net framework 3.5.1 is installed. I would like to run DNN under an existing .net site. For this test environment I have  website called testFoo (not the default website)  currently running, stored in c:\inetpub\wwwroot\testFoo, with the unzipped ddn install files actually located under this directory (c:\inetpub\wwwroot\testFoo\dnn). In IIS I added an application under testFoo called dnn and pointing to the foo directly. Am I taking the proper approach?