>Setting up a virtual directory seems like a good solution. However, I am not able to choose any directories off the network drive. The OK button becomes disabled.
>
>Is there a security issue that I can get around? Or will IIS not allow a virtual directory with a source folder from a network drive?

I don't know. As for me, I never use the INETPUB directory. I always use a drive other than that one in a totally different branch. It can be either a virtual directory or a new Web site you define.