This setting is not mandatory and PHP on IIS7 will work fine with default value for it. The setting is supposed to be set in the <fastCgi> section of the applicationHost.config:
Here is how you can set it in applicationHost.config:
<fastCgi>
<application fullPath="C:\PHP\php-cgi.exe" maxInstances="4" instanceMaxRequests="10000">
<environmentVariables>
<environmentVariable name="PHP_FCGI_MAX_REQUESTS" value="10000" />
</environmentVariables>
</application>
</fastCgi>
What error do you get when you run appcmd?