After some digging, I found some useful links, such as this and this. I list all necessary steps to run an ASP.NET MVC application in IIS 7 here in case somebody needs helps.
1. In IIS, I like to create a dedicated application pool MyPool, and specify the correct .NET framework version and Managed Pipeline Mode, mostly Integrated.
2. Check the created pool, and we can see by default the Identity using ApplicationPoolIdentity. This is the recommended way to use in a development environment. Some blogs suggest changing this to "Local System" or others. If this is changed to "Local System", then step 4 is not needed. However, this change may bring some security risks. You can check the links I listed and see some good arguments. I will keep ApplicationPoolIdentity for my application.
3. In IIS, under Default Web Site, create an application for the website, give a proper Alias and point to the physical path of the project. In a development environment, I just directly point to the web site project. Then let the application use the dedicated pool.
4. In SQL Studio, add new login IIS APPPOOL\MyPool. You may check this link to see some good discussions. Remember to assign proper roles to this login. We don't want to give too much privilege for this login.
5. Sometimes we may need to enable MSDTC on the machine to support distributed transaction if the application uses distributed transaction. On Win7, go to Control Panel -> Administrative tools -> Component Services, expand Computers -> My Computer -> Distributed Transaction Coordinator -> Local DTC, and right click Properties. Under Security tab, check Network DTC Access, Allow Remote Clients, Allow Remote Administration, Allow inbound, Allow outbound. Choose Manual Authentication Required. Click OK. A reboot may be needed here.
