Scott Guthrie announced IIS Express on his blog.
Looks exciting. Few things I'm curious about people will ultimately try to use to replace XP 5.1 version with this, which is fine. And also run on Windows Server 2003. I've not tested the beta version or what it can do. Oh, it'll run on Vista Basic, which has no web server. I can see the questions now on http://forums.iis.net, hey how can I get IIS Express to run on ......It'll be interesting.
Microsoft MVP - IIS