I guess my title really is appropriate then because I promise you I built an entire website using .net 2.0 on this very machine using sql server 2005 as the backend without ever having installed IIS. I guess my "dazed and confused" title is appropriate, lol. I always just used the debug or start without debuging option in Visual Studio.

Okay. I guess I shouldn't question why. I'll just do it and see what happens. Maybe this time the database will install correctly. I'm still not sure if I truly need the source or just the Starter kit, but the installation documentation doesn't mention the Starter kit so I'll do exactly what it says.

Just on the off chance that this will help someone else who may be having similar issues, I'll try to recap what I've had to do so far.

1. If you install IIS after you've installed the .net framework you will have problems. You need to choose  Add/Remove Programs on your start menu then choose the .net framework and choose Repair.

2. I think the Install documentation is more geared toward installing the source code on a Windows 2000 or Windows 2003 server. I played around with several different things for setting file permissions. In the end I removed the "Everyone" and added both the ASPNET and IUSR_MACHINENAME accounts and gave them full control. (Whether I needed both, I'm not sure. )

3. IIS - I had to select more than just the Read option under the Virtual Directory tab. I gave it Script Access, Read, Write, etc. Everything. I also right clicked on my DotNetNuke virtual server and choose All Tasks/Permissions Wizard and told it to be Public Website.

4. For the version I'm using (4.05.05), you have to move the config/dotnetnuke.config to the website root.

After all this - I ran http://localhost/DotNetNuke/install/install.aspx?mode=install

It didn't look like anything at all was happening. I shut it down and did it again. Big nothing again. I shut down my machine and restarted. Same thing. After disregarding the notion to fling my laptop out the window, I thought to go to install/installwizard

Aha! I got the message: "Dotnetnuke has already been installed on this machine". I took a look at the database - sure enough. It was filled with lovely tables.

I browsed back to here: http://localhost/DotNetNuke/Default.aspx

Received the below error. So. I'm not sure if it did completely install, but it sure as heck looks like a step forward. I'm not sure what else it would need to install besides running a sql scrip to create the tables/procs, etc. At this point I'm contemplating whether I should uninstall it (gah) and reinstall it or just try to fix whatever's going wrong now. I'm a tad concerned because everything I've read seems to indicate that I should have received some sort of status page.

Exception Details: System.NullReferenceException: Object reference not set to an instance of an object.

Source Error:

[NullReferenceException: Object reference not set to an instance of an object.]
   DotNetNuke.Entities.Portals.PortalSettings.GetPortalSettings(Int32 TabId, PortalAliasInfo objPortalAliasInfo) +91
   DotNetNuke.Entities.Portals.PortalSettings..ctor(Int32 tabId, PortalAliasInfo objPortalAliasInfo) +83
   DotNetNuke.HttpModules.UrlRewriteModule.OnBeginRequest(Object s, EventArgs e) +2750
   System.Web.SyncEventExecutionStep.System.Web.HttpApplication.IExecutionStep.Execute() +92
   System.Web.HttpApplication.ExecuteStep(IExecutionStep step, Boolean& completedSynchronously) +64

Please try this and tell me where you get stuck

Download DotNetNuke The trick here is to download the Install Version. The source is bulky and not useful for module development because you don't want to develop a module on an installation that is not standard.
Create a directory on your hard drive. Do not put it under the wwwroot directory because it will most likely have permissions set that will make the installation difficult.
Unzip the files to the directory
(The following screen shots are on Windows XP Professional) In IIS configuration, create a new Virtual Directory.
Click Next
Give the site a name
Point to the root of the directory
On this screen check the boxes next to "Read", "Run scripts (such as ASP)", and "Execute". Then click Next.
In IIS, go into properties for the site you just created and click on the ASP.NET tab and insure that you set the site to run under ASP.NET 2.0.
Go to the site in your web browser
The installation wizard will appear and guide you through the installation.