Well I was able to figure that out.

but here is my next problem after I had created the IIS configuration and navigated to the site http://localhost/DotnenukeP to install it the new version

It threw the following error as shown in the screenshot. It gives the error for Config and not servername. Also I can do this only after I have changed my initial DotNetNuke folder name as DotNetNukeXXX. Orelse the IIS goes to the older web.config file. So is there a problem with having active IIS connections to the old DotNetNuke and to the new DotNetNuke version. I am really confused. Please help me so that I can get to my actual task of trying to create modules.

Line 65:         ''' -----------------------------------------------------------------------------
Line 66:         Private Sub Application_Start(ByVal sender As Object, ByVal e As EventArgs)
Line 67:             If Config.GetSetting("ServerName") = "" Then
Line 68:                 ServerName = Server.MachineName
Line 69:             Else