I've been looking all over for decent instructions on how to get hgweb working on IIS but I haven't found much of worth.
There's this "step by step" on the Mercurial wiki, but it's not very good. There's also this and this, but again, I can't find good steps to lead up to where those get started.
It seems since Mercurial 1.5.2 was released, these tutorials don't work exactly right. For one thing, hgwebdir.cgi has been removed, and is now replaced with hgweb.cgi.
The instructions that worked best for me is at eworldui.net:
Those instructions are meant for IIS 7 or greater. If you're setting this up on IIS 6, I wrote up similar instructions geared toward Win2k3 and IIS 6.0:
http://partialclass.blogspot.com/2010/05/setting-up-mercurial-server-on-win2k3.html
UPDATE: Shortly after getting this working I learned that BitBucket changed their pricing scheme to offer free, unlimited, private hosting: https://bitbucket.org/. I would've opted for that in a heartbeat when I was originally working on this project.
I've been fighting with this setup for mercurial 1.7.2 for the past week or so, I had to do things slightly differently than the above articles do in order to get it working.
Posting here because google kept bringing me back here....
Full instructions posted here
I followed a combination of these instructions and these (in the source)
The main differences are that I had to do the "pure python" install of mercurial otherwise it would complain about missing dlls, and I found it was important to use the "python installers" for pywin and isapi-wsgi. (maybe this is obvious to experienced python developers, but I'm a python newbie so it was news to me)
Hope this helps somebody and I'm not just making stuff up (I might be, like i said, python newbie)