>When I create a Web Service with VS 2.0 Do I select "New Project" or "New Web Site"?

VS 2005 has been made in a way to make it more complicated to synchronize Web Services from local to production server. Yes, this is under New Web Site. If MS thinks a Web Service is not a project, at least, they could have created another menu item such as New Web Service. But, making it under New Web Site is really confusing. It took me a while to find it as I never thought this could have been under that option. This has been discussed recently. For now, this is the place to create it.

>If I select "New Web Site" I can select "ASP.NET Web Serivce" I get the right template and it work if I run it but I do not have a project and I cannot precompile.
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>How do I create a new Web Services with .NET 2.0 and get a Precompile exe?

There is no exe for Web Service. You would end up with DLL.

To publish, yes, another much more complicated task, you have to select Build / Publish Web Site. Yes, again, they consider a Web Service a Web site. So, this is also something they would have to improve in the next version. This will go in another new directory branch. You cannot publish under the actual branch. Also, you would end up with a very big branch instead of just the ASMX and the DLL files you are looking for. IAC, they are there. Once published, simply upload those two files to the server. That should do.