Thanks for all your contributions. It has clearly taken me some time (from the lag on this reply) but I have now got my head around MTS. This really is the only way. The IUSR_ account can't have W permission as this would allow some hacker to write a nasty piece of code onto the server, and then be able to execute it!

I wouldn't say MTS was the easiest piece of software to understand and implement, but it's doing the job. Plus it also makes it possible to update the DLL without stopping the whole web server, which is a bonus!