Here are the steps I performed as best as I can remember:

1. I created a sub folder called wordpress off my root folder to copy the WordPress bits into and used the Hosting Control Center File Manager to give R/W access to the Root and wordpress folders.
2. There was no need to use the Hosting Control Center to declare a separate IIS7 virtual directory for the wordpress sub folder since your hosting domain points directly to your hosting root folder if you are not using domain aliasing to the sub folder. I tried for a couple days to use domain aliasing and mostly got it to work but had problems I could not get around when I tried to setup permalinks and kept getting pages and posts not found errors. Then again, I’m a .NET programmer and not a php guy and did not have the time to learn php on the spot and had no way to debug it.
3. I then copied index.php into the root folder and modified it as suggested above as well as leaving it unmodified  in the wordpress folder.
4. I ran the famous 5 Minute WordPress install typing in the full path http://<My Domain>/wordpress/wp-admin/install.php, logged in and immediately modified the General/Settings for the site URL to reference the wordpress folder and the blog URL address to reference the root folder as the above article suggested.
5. I created a couple posts and pages to test with and I was done. I logged off and typed in just the domain URL by itself and verified that my posts and pages were all accessible without wordpress showing in the URL path.

I later found out that if you install Arne Brachhold’s Google XML Sitemaps plugin, it will not generate a sitemap without error [at least I could not get it to] unless you set a custom location for the sitemap.xml file and specify the complete path such as D:\Hosting\5363706\html\sitemap.xml rather than using the default relative path. It would only work by default if the site and blog URL values were the same but always gave the error if different unless the full path was set in the custom setting. When I let the plugin use the default path I was getting the following errors:

# There was a problem writing your sitemap file. Make sure the file exists and is writable. Learn more
# There was a problem writing your zipped sitemap file. Make sure the file exists and is writable. Learn more

I also got Permalinks to work just fine. See my other post for Using Permalinks on GoDaddy WIMP.

(I’ll bet you Linux guys love that acronym ).

Dave

After a bit of looking around, I found John Sessford’s article at http://www.ikailo.com/94/url-modrewrite-workaround-iis-60 on how to setup a custom 404 error handler using php code that addresses permalinks. I have verified this works for GoDaddy’s new grid hosting using IIS7 where GoDaddy no longer installs the Microsoft URL Rewrite module.

Do the following steps to implement:

1. Backup your database to your web folder and then backup your website with FTP in case anything goes wrong.
2. Get John’s php code from his article [referenced above] and create a file called 404-handler.php in your main WordPress folder. You can change the name as long as you also change $thisfile in the php code.
3. Use the GoDaddy Hosting Control Center/Settings/404 Error Behaviour to set 404 errors to Use custom page and set the location of the above file entering the relative path to the file.
4. Login to your WordPress site as an admin and update Settings/Permalinks to a custom value such as one of:

/%year%/%monthnum%/%day%/%postname%/ or /%category%/%postname%/

That’s it! Best of both worlds – WordPress and .NET!

I’m still very new at WordPress and there may be performance or other ramifications to the above hack. If you know of any or know a better solution for GoDaddy WIMP please comment [wow, we sure got the leftovers on that acronym].

Dave