>I'm just getting back to dealing with a web app after upgrading to SP2. This is the first time I've tried anything with a web app on this machine since doing the upgrade.
>
>I can't get localhost to work at all, but the loopback adapter does (127.0.0.1). The hosts file looks perfectly normal. It has an entry for 127.0.0.1 and associates it with localhost. Yet when I try to use localhost, I get no response. IIS doesn't even create a log entry.
>
>I've tried removing IIS and reinstalling it, but that didn't help. Am I relegated to using 127.0.0.1 on this machine from now on, or does someone have an idea of what my be wrong?

The problem could be in new secure features in your IE browser.
Your IIS may be works perfectly and not need to reinstall it afain ;-)