I ran into this after a Vista -> Win 7 upgrade. To attempt to diagnose go to the IIS control panel object to see if it shows any messages. In my case, something was listening on port 80,but did not respond in any meaningful way. The IIS Manager also gave a message that settings did not migrate during the upgrade. I removed the IIS windows components, then re-added them.
Finally, the World Wide Web Publishing and Windows Process Activation Services were not running. I had to enable the WPAS and start it, then WWW Publishing, then I could access my web sites.
I disagree with others that you should not be localhost - there is nothing wrong with using localhost, and it's a perfectly valid way of addressing with your local computer for development or other purposes.