Not sure how correct or valuable this is, but this is currently the web.config file that I use for local Windows 7 II7 development.

[sourcecode language=”xml”]
<?xml version="1.0" encoding="UTF-8"?>
<configuration>
<system.webServer>
<rewrite>
<rules>
<rule name="Main Rule" stopProcessing="true">
<match url=".*"/>
<conditions logicalGrouping="MatchAll">
<add input="{REQUEST_FILENAME}" matchType="IsFile" negate="true"/>
<add input="{REQUEST_FILENAME}" matchType="IsDirectory" negate="true"/>
</conditions>
<action type="Rewrite" url="index.php"/>
</rule>
<rule name="wordpress – Rule 1" stopProcessing="true">
<match url="^index\.php$" ignoreCase="false"/>
<action type="None"/>
</rule>
<rule name="wordpress – Rule 2" stopProcessing="true">
<match url="^files/(.+)" ignoreCase="false"/>
<action type="Rewrite" url="wp-includes/ms-files.php?file={R:1}" appendQueryString="false"/>
</rule>
<rule name="wordpress – Rule 3" stopProcessing="true">
<match url="^" ignoreCase="false"/>
<conditions logicalGrouping="MatchAny">
<add input="{REQUEST_FILENAME}" matchType="IsFile" ignoreCase="false"/>
<add input="{REQUEST_FILENAME}" matchType="IsDirectory" ignoreCase="false"/>
</conditions>
<action type="None"/>
</rule>
<rule name="wordpress – Rule 4" stopProcessing="true">
<match url="." ignoreCase="false"/>
<action type="Rewrite" url="index.php"/>
</rule>
</rules>
</rewrite>
</system.webServer>
</configuration>
[/sourcecode]