The Web Service must have write permissions to the folders in which the web service is installed. The following images come from an IIS 7 machine but the process of granting the permissions is the same on an IIS 6 machine:
Step 1. Open the Internet Information Services Manager (inetmgr.exe)
Step 2. Navigate to the root folder for the Web Service
Step 3. Right click on the node and select ‘Edit Permissions’. Select the ‘Security’ tab In the ConquestWebService properties dialog. Click the Edit button
Step 4. In the ‘Permissions for ConquestWebService’ click the ‘Add’ button.
Step 5. In the ‘Select Users or Groups’ dialog, enter the local IIS_IUSRS group. You have to enter the complete ‘machine\iis_iusrs’ string or use the ‘Advanced’ button and the ‘Find Now’ button to pick it from the list, then Click OK.
Please note that this is a local group not a member of the Active Directory Domain.
Step 6. Back in the Permissions for ‘ConquestWebService’ dialog, make sure the IIS_IUSRS group has Modify permissions as shown below. Click ‘Apply’
Note 1: On IIS 6 the account names are different; “NETWORK SERVICE” and “IUSR_MachineName”. Both accounts will need to be granted permission.
Note 2: If an XP machine was to be used for some reason, it is easiest to manually set permissions to the, <MachineName>\ASPNET account, which would also need to be set up in SQL Server.