in some situations you might get the following error : "web project located at the following URL: 'http://localhost/webapplication1xx'.
'HTTP/1.1 500 Internal Server Error'." when you are attempting to open a new Asp.Net web Application or Asp.Net Web Service Application.
It took me some time to find out how to solve this issue , I checked every security issue on the iis and even reinstalled VS .Net 2003, but it didn't help.
finally, the resolution is very easy.
1) Delete the ASPNET account using Computer Management.
2) Recreate the ASPNET account by running: aspnet_regiis -I, from
C:\<winDir>\microsoft.net\framework\v1.1.4322 directory :
Click Start, and then click Run.
In the Open text box, type cmd, and then press ENTER.
At the command prompt, type the following, and then press ENTER:
In this path, version represents the version number of the .NET Framework that you
installed on your server.
You must replace this placeholder with the actual version number when you type the
command. If you use Visual Studio 2003 and framework 1.1 it it v1.1.4322
3) Restart IIS.
4) Now the ASPX pages should work fine and you also should be able to create new
ASP.NET web projects.