If you did what I did, and just picked the default IIS installation options for your Windows 7 box, then you probably get a bunch of fun errors.
This one is if you didn’t install IIS support for asp.net. (WHICH SURPRISE, IS NOT DEFAULT SELECTED)
This configuration section cannot be used at this path. This happens when the section is locked at a parent level. Locking is either by default (overrideModeDefault="Deny"), or set explicitly by a location tag with overrideMode="Deny" or the legacy allowOverride="false".
The fix is to install ASP.NET support. Easy.
Now, why the error from the title? Why no PageHandlerFactory blah blah blah? Well, .NET didn’t register itself with IIS the way it wants, so you need to rectify that.
That is also easy. Never hard if you have the right tool, it’s finding the right tool that is hard.
Open a Command prompt with Administrative Privileges. (Key, otherwise it doesn’t work).
go to your Framework folder. %WINDIRMicrosoft.NET
Pick the one you are working with, and the right bit type. i.e. 64 if your on 64 bit. Then the right version. I use 4.0
Call aspnet_regiis.exe -i
Voila, your done. Restart IIS and try your page again.