Installing MOSS 2007 on Windows Server 2008 is quite straightforward. Andreas Glaser has excellent 6 part series blog with screen shoots and explanations that makes the installation easy and painless. I was installing MOSS on a single Windows Server 2008, 64 bit with Forefront on it. After the installation of  MOSS 2007 with February updates, configuration was interrupted at the point of creating SSP web application, IIS has thrown 505 error with a message that “C:\Windows\system32\inetsrv\config\applicationHost.config” is not well-formed.

The explanation for this error is given in Microsoft KB article 952265. As stated in the article, there is a know issue when running Forefront on Windows Server 2008 that may cause the data in IIS 7.0 to be corrupted.

This problem occurs because of a known issue of cache coherency between mapped I/O requests and non-cached I/O requests. Forefront Client Security real-time protection uses memory mapped I/O requests for scanning files. This problem affects non-cached I/O requests. It may cause data corruption or cause truncation operations to be unsuccessful.

This really comes dow to the synchronization error and the timing of Forefront scanning the file and the IIS writing SharePoint application pool data in the applicationHost.config so the error is intermittent in the nature. 

The hotfix is available for download on a request and several bloggers (YESChandana.com and Jeroen) are offering solutions if your IIS is already corrupted which come down to restoring the latest healthy version of the applicationHost.config file.