I had been trying to solve this error the whole of today and luckily, i managed to find out the solution on my own. I saw your post while researching so i thought i should contribute and share with the rest facing this error.
If your server is running on windows vista, the IIS 7 probably was installed by default. However, the default installation options does not include the both CGI and ISAPI modules. All you have to do is to access Control Panel > Programs and Features > Turn Windows features on or off (on the left panel) then select to install module you need for the server.