Windows Server 2008 IIS 7 goal is to enable deployment and operation of high performance, high security, and high availability. Windows Vista IIS 7 is about enabling people to develop applications on IIS.

Bill S does a good job of explaining the technical differences. It’s about half way down the post he has on his blog here: http://blogs.iis.net/bills/archive/2006/09/18/IIS7-_2D00_-Vista-vs.-Longhorn-Server.aspx