Following are the steps to install the IIS on Windows Server 2008. In Windows Server 2008, you install IIS by adding Web Server Role.
Run Start->Programs->Administrative Tools->Server Manager. Then click on Add Role.
Click at Add Role and then select Web Server Role IIS.
You will be asked to add other dependent roles. Click Yes to add other roles.
If you planning to install Microsoft SQL Server Reporting services or SharePoint 2007 then add IIS 6 compatibility features. Bellow is screenshot of most optimal settings for web development purpose.
Click next to confirmation screen and then click finish.
This will start installing the IIS. Wait for completion and then verify you see successfully installed message.