I always used to ask myself while creating a web project in Visual Studio 2003 with ASP.NET 1.1, that why the hell we need to install the IIS even though our aim is to just develop a web application and not to host it.
For all of those who used to think the same Microsoft came up with the Website Model of development with ASP.NET 2.0.
Now with ASP.NET 2.0 and Visual Studio 2005 instead of creating a new project inside Visual Studio, the Web site model lets you point to a directory and start writing pages and code. Not only this the built-in ASP.NET Development Server can be used to quickly test your site (even without installing IIS), which hosts ASP.NET in a local process and prevents the need to install IIS to begin developing.
This new website model enables us to develop our web application without thinking about packaging and deployment.
If your application is complete and you are ready to deploy, you have several options. The simplest choice is to copy your files to a live server and let everything be compiled on-demand (as it was in your test environment). The second option is to use the aspnet_compiler.exe utility and precompile the application into a binary release.