I have been using IIS Express to do some of my recent development instead of using the ASP.NET Development Server so that I could use the additional functionality within IIS. (Personally, I hate developing with the ASP.NET Development server but I am having to develop on XP at the moment and IIS 5.1 is not much better. Getting IIS Express has been a real bonus.). I had configured my IIS site originally with a localhost address and Visual Studio debugging worked fine. Unfortunately, Fiddler doesn’t like monitoring localhost addresses so I created a new entry in my Hosts file to use localhost.
This created my second issue. When I tried to run my app within VS I got the ‘Unable to start debugging on the Web server’ error, IISExpress was reporting 401 errors and all because of the entry in the Hosts file. So after the usual search to try and find similar problems I came across this MSDN KB article. I actually used Method 2 in the article and I didn’t need to reboot my machine, just restart my IISExpress instance. This solved my problem as Visual Studio was then happy to go through the authentication process and Fiddler was capturing my Requests/Responses.