>>>I had a similar problem when first using .NET. I had to run "aspnet_wp.exe /i " to reinstall the service to allow proper operation. I believe this resets all the installation defaults.
>>>
>>>HTH,
>>
>>It doesn't seem to help. It works at http://localhost:8080/CreateDatabase.aspx, but it doesn't work if I use virtual directory on the server.
>
>Sorry Nadya, beyond this I don't have any good suggestions.
>
>:( ,

Are you working with WEB Matrix or with ASP.NET directly? I'm going to try in ASP.NET instead...