While trying to get a Samples section of this website up and running I ran into a couple of problems. When creating a virtual directory in IIS that was physically under the main application (QueensDev\Samples being the location of the subdirectory) I got an error that one of the Blogengine modules wasn't found. I thought this was odd because the Samples section didn't use any Blogengine dll's at all.
Turns out that any application that is in a subdirectory of another application in IIS will inherit all properties from the parent web.config. This can be highly desirable in certain situations but it wasn't what I was suspecting since it was a separate application in the subdirectory. It was a problem for me because the subdirectory doesn't contain all the dll's refrenced in the parent directory which was causing my app not to load. I believe it was trying to find the HTTPModules and Handlers.
I ended up using the solution below. Wrap system.web in the web.config with the location tag, self explantory. However, VS2005 and 2008 don't seem to like the location tag but it works just fine. I found this at:
http://aspadvice.com/blogs/ssmith/archive/2006/08/21/HttpModule-Breaks-SubApplications-Problem-Solved.aspx
<location path="." inheritInChildApplications="false" allowOverride="true">
<system.web> ...
</system.web>
</location>
More info can be found here:
http://blogs.infragistics.com/blogs/ambrose_little/archive/2007/06/20/isolating-web-settings-from-sub-applications-using-inheritinchildapplications.aspx
http://msdn2.microsoft.com/en-us/library/ms178685.aspx