I found this online at http://www.whitworth.org/2009/03/10/plugin-upgrade-failed-in-wordpress-using-iis-7/ . I wanted to post it here so I could find it when I needed it.
I have modified it a bit.
How to modify IIS7 to allow WordPress to allow automatic updates:
- Make sure your Application Pool identity is a user account (not Network Service). This only needs to be a Domain User. Go to Application Pools under the Server in the IIS Manager and change the identity to this user. I have used the same user for multiple sites.
- In IIS Manager, right-click on your website –> Manage Web –> Advanced Settings
- Click the … button in the Physical Path Credentials box.
- Specify the account you are using for the Application Pool Identity
- Find the wp-content folder under your web site, right click and choose Edit Permissions…
- Go to the Security Tab, then click Add and enter the Application Pool Identity account. Give the account modify rights
- Click OK until you have closed out of the security dialog
- Reset IIS – At the command prompt run: iisreset /resatart
- Test plugin update