I have a website project, not a web application. I have Visual Studio SP1 (beta) installed, but I only see the option to use an external web server; there is no \"Use IIS E
VS 2010 SP1 beta has support for IIS Express. I am not sure if you have installed IIS Express separately or not (VS 2010 SP1 does not include IIS Express and you need to install it separately). If you haven't installed IIS Express install it from here