Your problem is that example.com is, in essence, running example.com/default.aspx, since this is your default page. This redirects to example.com again, which will redirect yet again... creating an infinite loop.
This should be done through IIS if at all possible, not through ASP.NET.
Edit: Forgot to mention, you'll probably need a rewriting engine for IIS to accomplish this--I don't believe it provides URL rewriting capabilities by default.
[edited by: WesleyC at 6:26 pm (utc) on July 31, 2007]
Somewhere in this forum is a post that described how to accomplish this and it had something to do with the fact that Microsoft used a capital D on Default. I wanna say the thread was roughly 6 Months ago.