This is now a much easier process and pretty much everything you need to know is here http://docs.joomla.org/SEO_and_IIS_ISAPI. I already had our server setup for fastcgi so this was very straight forward after installing the MS rewrite module. Having said that I could not get Artio SEF to work however the default Joomla SEF works perfectly for me and is more than adequate for my needs. My advice would be to start simple with just native Joomla SEF, and don't forget you have to turn on both SEF and rewrite in the config file, if you don't turn on rewrite it puts an extra index.php in all your URL's, should look like this

var $sef = '1';
var $sef_rewrite = '1';

The web.config on the web page above works flawlessly with IIS7 and Joomla 1.5.x

Have fun !!!