I know that generally speaking, this cant be done, that is get another PC to call a site hosted under the ASP.NET DEvelopment Web Server remotely (generally
Can't you just run IIS7 in Classic Application Pool mode?
The Development Web Server is strictly limited to Localhost, you would either need to decompile and recompile it, or set up some kind of Proxy on your machine.
And on an unrelated Topic: Even though Win2003 Server SP2 R2 should be supported up to March 2012, maybe IIS7 Support should be added to your application to make sure you can run on 2008 Server as well.