Start IIS manager: Start > Administrative Tools > Internet Information Services (IIS) Manager
First you have to create a new Application Pool called Mercurial. To achieve this right click on Application pools and select Add new application pool. In the popup type Mercurial as name and click ok.
Switch to the Directory Security tab, click on Edit in the Authentication and access control. DIsbale anonymus access and enable basic authentication. This makes you able to access repositories using users configured on the server.
Now you have to create a new handler mapping:
right click on the new Mercurial webpage in the left tree
click Properties in the context menu
click on the Home Directory tab
click on the Configure button then choose the Mappings tab
click on Insert and in the Executable field set the