I am going to respectfully take issue with a number of your comments, Wes. Please take these comments in the constructive manner in which they are intended.
A common theme I have seen when dealing with DNN installation issues over the years is, essentially, "it's difficult and we can't control it all". Sorry, Wes, but I'm not buying that. I've all sorts of services/programs through WebMatrix. They "just work". A good example is WordPress. I've used that a number of times (my production server has DNN and WordPress running) and I've never had an issue with WordPress. It just runs, installs some basic stuff, navigates me to a web-basic wizard (no issue - ever - with ASP.Net running) and leaves me with a fully functional WordPress site.
In fact, here's an interesting data point. This apparently poorly-configured server on which I am trying to install DNN? I just run WordPress through WebMatrix - runs perfectly. No errors, no problems with ASP.Net - just leaves me with a fully functional WordPress site. That tells me that I have lots of stuff configured on this server just fine. And, to reiterate, it is intentionally THE most basic, plain vanilla WS 2008 R2 installation with the ASP.Net role installed. And I hasten to add that I haven't even THOUGHT about file permissions, SQL Server roles, IIS handlers - it took me less than 5 minutes to completely get up and running.
Meanwhile I just CAN'T get DNN installed. With all due respect, your response - which is consistent with many I have received when I have had installation questions - just seems to be trying to find excuses. I personally think that the DNN folds need to step back and ask a really simple question - "Is this good enough?".
Or maybe you just said it the way it is - "DNN is a complex system". Maybe it's just too complex now.
I'm sorry to vent but it's REALLY enlightening to me that I can install WordPress on this very same server through WebMatrix (despite the WordPress installer having the same challenge of having to deal with these millions of different combinations!) and yet DNN is so complex.
Now, stepping back, given that WordPress installed just fine, what does that tell us about the server? I assume that means my ASP.Net role is configured just fine (as I suspected all along) and that there are a number of other assumptions we can make. Any other thoughts on what the issue might be?
Mark