By default IIS is not enabled in the stadard vista install. It therefore first needs to be turned on.
The following link provides a short cut to the MS knowledge base article on setting up Vista IIS or web application folders
http://msdn.microsoft.com/en-us/library/aa964620.aspx
For the sake of completeness here is the link for 2003 server
Also the following article may be of assistance.
http://www.windowsnetworking.com/articles_tutorials/Web-Sites-Windows-2003.html
Trouble shooting these permissions can be greatly simplified by using the Process Monitor (Sysinternals) available here:
http://technet.microsoft.com/en-us/sysinternals/bb896645.aspx
There is also a good article on its use here:
The folowing article expains access control:
If you get a 401.3 error when you try to browse the new site through IIS then