Evan,

>Do you think I can do all the testing while running IIS and SQL Server on my local development desktop machine (NT4 Workstation) and then move stuff up to production NT server?

Sure, especially if you can host on your machine a test set of data files also. This way, you can preferably set up the app on your machine exactly the same as the live server, same data paths, same directory structure and script maps, etc. Makes life much more peaceful.