I have an IIS7.5 web-site, on Windows Server 2008, with an ASP.NET MVC2 web-site deployed to it. The website was built in Visual Studio 2008, targeting .NET 3.5, and IIS 5.1
In addition to checking if you're running in integrated pipeline mode, make sure your application pool is set to use .NET! I recently ran into this problem, and when I went in to check the app pool settings, I found that somehow it had been set to "No Managed Code." Whoops!