I recently upgraded from Visual Studio 2010 to the Visual Studio 2012 RC. The installer also installs IIS 8 Express which Visual Studio now uses as the default web server.>
Just a quick update for anyone else who might run into this issue. As of today, changing the %userprofile%\documents\iisexpress\config\applicationhost.config does NOT work any longer (this was working fine until now, not sure if this is due to a Windows update). After hours of frustration, I changed the web.config to add these handlers to system.webserver to get it to work: