The FastCGI handler does need to parse the response headers.
We did introduce some bugs in this code with the GoLive release that would result in the error that you describe. We believe that we fixed it with the latest release at http://www.iis.net/default.aspx?tabid=1000057.
If you are seeing the "data is invalid" error, and you are using the latest version of fcgiext.dll (dated 10/25/2007), please contact me at wadeh@microsoft.com. I would like to make sure that this problem is fixed. If you have a way to reproduce it, I would like very much to see it.
Thanks,
-Wade