What do I need to run PHP applications on IIS?
Make sure you get the FastCGI extension for IIS 6.0 or IIS 7.0. It is the single most important thing you can have when running PHP under IIS. Also this article should get you setup:
http://learn.iis.net/page.aspx/247/using-fastcgi-to-host-php-applications-on-iis-60/
Everything beyond this is simple, MySQL and what not.
We just rolled out PHP 5.2.6 + FastCGI on our shared hosting platform without any problems. As long as you follow the steps outlined in the article Nick linked to then you should be just fine.
My only additional piece of advice would be to forget about using the fcgiconfig.js script to modify the fcgiext.ini file, it's more of a hindrance than a help. Just edit it by hand, you also learn more about how it works.
If you're installing PHP onto IIS 7 then this link should be worth a read though:
@pix0r
That actually annoyed the hell out of me too and nothing came close to Apache mod_rewrite. Because they all have this overly complex XML structure. So I actually took the time and wrote my own rewriter for IIS 6.0 and IIS 7.0. Non-.NET applications only works in IIS 7.0.