noob to asp need help diagnosing setup issue (assuming iis setup?)

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ASP.NET

to start out, here is my environment:
I'm running windows server 2k3 sp2, with VS .net 2008 installed.
I have .net framework 2.0 sp1, 3.0 sp1, and 3.5 installed, and the various windows sdk's for vs 2008 (if a specific one is necessary I can list out what I have). I installed VS a while ago, but checking with the installation disk, it does show that I did make sure the web development components were selected as part of the original installation.

Looking in IIS, in the web site properties (both if I click on the overall 'web sites' folder, or the specific site i'm testing from), there is an ASP.net tab which shows my asp.net version as 2.0.50727, virtual path: web.config, location 'C:\WINDOWS\Microsoft.NET\Framework\v2.0.50727\config\web.config'

The asp.net web service extension is also present and set to Allowed, and the site I'm testing from has script execute permissions.

Now- when I try to run any asp.net page type, I get the error below:

<br />
Runtime Error Description: An application error occurred on the server. The current custom error settings for this application prevent the details of the application error from being viewed remotely (for security reasons). It could, however, be viewed by browsers running on the local server machine.<br />
<br />
Details: To enable the details of this specific error message to be viewable on remote machines, please create a <customerrors> tag within a "web.config" configuration file located in the root directory of the current web application. This <customerrors> tag should then have its "mode" attribute set to "Off".<br />
<br />
<br />
<!-- Web.Config Configuration File --><br />
<br />
<configuration><br />
    <system.web><br />
        <customerrors mode="Off" /><br />
    </system.web><br />
</configuration><br />
<br />
<br />
Notes: The current error page you are seeing can be replaced by a custom error page by modifying the "defaultRedirect" attribute of the application's <customerrors> configuration tag to point to a custom error page URL.<br />
<br />
<!-- Web.Config Configuration File --><br />
<br />
<configuration><br />
    <system.web><br />
        <customerrors mode="RemoteOnly" defaultredirect="mycustompage.htm" /><br />
    </system.web><br />
</configuration><br />
<br />
</customerrors></customerrors></customerrors>

I tried making the suggested changes in the web config file, but I see no change in the output. Also, when I try to debug from within visual studio- if I run from the 'development server' (localhost with a specified port) it works fine, but when I try to debug from he actual site (local iis), I get an error that it can't debug. It says
"the format of the specified network name was in valid"

The weird thing is, I just remembered I let a friend of mine test a site he was working on a while back that was asp.net based, and it used to work fine. I don't touch this machine much, so I'm not sure what could have changed...it's possible I installed a service pack or later .net framework version or something, but everything seems to point to the right framework dll... I'm really not sure what else to look for here. If anyone could hep me fiture this out, i would REALLY appreciate it!

(also, all other page types work fine on the server. I can access them without any issues)

Thanks