OK - a little more on what we found.... Besides recreating the c:\inetpub folder, the R2 Upgrade did the following… .It deleted a reg entry added by the iis7 move/config script : HKLM\System\CurrentControlSet\Services\WAS\Parameters\ConfigIsolationPath The R2 Upgrade reverted 2 reg entries modified by...

There's plenty of information out there about this error. I haven't seen anything specific to IIS7. The error is random, but after it happens once, it continues for every subsequent request until the site is restarted. We have 3 servers in a farm, this happens on all of them. We are on 2008 64bit...