The IIS integrated into Windows XP/2000 is only capable of running ONE (the so-called 'default') website :(
Luckily for all of us who is running Vista, Microsoft - finally - decided to remove this limitation in IIS 7.0 - However if you're stuck with Windows XP (as I am @ work), you probably be really happy to know that a small utility called XP Pro IIS Admin can fix the limitation of IIS 6.0 on Windows XP. The programs makes it possible to have a list of your websites and create any number of "real" websites (not just Virtual dirs). Of course - due to the IIS 6.0 limitation - only one of these websites can be running, but that's a limitation which one can live with. The below is a screenshot of the program:
If you're "stuck" on Windows XP you'll probably want to get this tool installed ASAP - So head over to http://jetstat.com/iisadmin and download away...