Bruce,

if you did not already I would suggest to use the Web Platform Installer for installing DNN.

Otherwise (I assume you install DNN on your local machine, and SQL Server is installed there as well):

1. Create a folder on your computer, e.g. C:\DNN
2. In IIS Manager, create a new Application Pool, e.g. DnnAppPool. Use the .Net 4.0 or .Net 4.5 framework and integrated pipeline mode. Make sure the Application Pool Identity is set to "ApplicationPoolIdentity". (in the application pool's Advanced Settings).
3. Set the permissions for the directory created in Step 1 for the Application Pool (e.g. "IIS AppPool\DnnAppPool") to Modify.
4. Unblock the DNN installation pack ZIP file, and then unzip it to the folder.
5. In IIS Manager, create a new WebSite, e.g. "DnnWebSite". Set the Application Pool to the application pool created in step 2 (e.g. DnnAppPool). Assign the folder created in Step 1, and add a host header, eg. "dnn.local"
6. Select the created Web Site and double click "Authentication" (under "IIS"). Select "Anonymous Identification" and click "Edit..." on the right hand side. Select "Application Pool Identity" from the given options.
7. If you have not already installed MS SQL Server Express do so. Then open SQL Server Management Studio and connect to your SQL Server Instance.
8. Create a new database, e.g. DnnDatabase.
9. Under Security :: Logins, create a new login. Use Windows Authentication, and add the Application Pool Identity (e.g. "IIS AppPool\DnnAppPool"). Assign dbo permissions for this login to the database created in Step 8.
10. Open the file C:\Windows\System32\drivers\etc\hosts (without any extension, note that the folder "etc" is hidden in newer Windows version, so I rcommend to copy and paste the path to Windows Explorer), using a text editor. Add the line
    
    127.0.0.1   dnn.local
    
    (or whatever hostname you assigned in Step 5). Save the file.
11. Now open your browser and type http://dnn.local in the address line. The installation process should start.
12. When it comes to the database selection, select the custom installation method. Use "SQL Server/SQL Server Express Database". Enter the Server name (e.g. ".\SQLEXPRESS") and the database name (e.g. "DnnDatabase"), use Integrated Security and check "Run Database as: [x] Database owner". If you want to setup the web site for development purposes, I would highly recommend to use an Object Qualifier, e.g. "dnn".
13. Click "Continue".

I hope this helps.

Best wishes

Michael

OK, stuck at a spot here in this process. Finally got SQL loaded with Management Studio so I can see what is going on. After I created the new database and new user login, assigned as DBO, but not sure how to add/assign the Application Pool Identity that was used in IIS?

Can you explain a little more please on how to do this? :-) I have been looking around on how to add/assign and Application Pool Identity to the new use with no luck.

Bruce