I'm having a hard time trying to configure Umbraco 4.7.1 on IIS 7 (32bit Windows 7). 

I downloaded Umbraco 4.7.1 from the Codeplex site and extracted the file contents (using WinRar, to avoid the "unblocking" problem).

Then I created a asp .net 4.0 website in IIS and mapped it to the folder with the fresh umbraco files. I entered the website on my browser and the umbraco wizard was displayed. I followed it until i got stuck on step 3. It won't get over the 0% status. I searched for topics on this issue without any luck.

Using the SQL Server Management Studio I can see the client gets connected but it won't create any tables or whatsoever

Using the browser developer tools, i can see that there are lots of client side warnings:
GET http://localhost:8103/install/utills/p.aspx?feed=progress 404 (Not Found)

Then I used WebMatrix to setup the site (mapping it to the same folder as the IIS site), everything went fine. Step 3 finished without errors, the database was correctly initialized. 

Then, I got back to IIS and the site is there, the frontend works perfectly but I still have a big problem on the backend:

I get a 404 error, for every 2nd level node I click in the navigation tree, except on the content section - where there's no 404 error, but no content data is loaded. As an example, here's what I get, when I try to edit a template:

I checked the folder structure and the editTemplate.aspx file exists but its on /umbraco/settings/editTemplate.aspx.

When I navigate to the settings section the URL is:
http://localhost:8103/umbraco/#settings
so it's seems umbraco is not using the #settings token, on its requests for some reason.

Then I tried to go to the settings section on the webmatrix version and everything works as it should, so it's clearly an IIS configuration problem.

I also realized that the URLs are built differently:
IIS: http://localhost:8103/umbraco/#settings
Webmatrix: http://localhost:55570/umbraco/umbraco.aspx#settings

I believe it may be related with some URL Rewriting configuration. I read some people had to tweak the IIS handler mappings, but I still couldn't solve it. Can someone help me on this? I'm lost.

Thanks