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It seems that my question comes down to how many instances of Internet Information Services we need to work with. For each working copy of the web site, doesn't a unique version of the web site need to be defined in IIS? If so then either 1) we'll have one server containing multiple versions of the web site, or 2) we each set up a web site on the instance of IIS that exists on one's own development PC.
I have a feeling that this will sound like a very ignorant question, but, then again, I really am rather ignorant.
Thanks!