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http://blogs.iis.net/bills/archive/2008/06/02/installing-asp-net-1-1-with-iis7-on-vista-and-windows-2008.aspx
http://blogs.technet.com/b/kennymaita/archive/2011/03/21/using-asp-net-1-1-in-iis7-or-iis7-5.aspx
http://blogs.iis.net/brian-murphy-booth/archive/2007/03/09/how-to-setup-asp-net-v1-1-visual-studio-net-2003-projects-on-iis7-vista.aspx

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this fix is related to the issue:
.net framework 1.1 doest not show under application pools after install.

run cmd
MKLINK /d c:\Windows\Microsoft.NET\Framework64\v1.1.4322 c:\Windows\Microsoft.NET\Framework\v1.1.4322

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<system.webServer>
  <httpErrors errorMode="Detailed" />
  <defaultDocument enabled="true">
    <files>
      <clear/>
      <add value="login.aspx" />
    </files>
  </defaultDocument>
</system.webServer>

in order to have system.webServer namespace work as expected from above:
in file: C:\Windows\Microsoft.NET\Framework\v1.1.4322\CONFIG
add this line right before the closing tag </configSections>:

<section name="system.webServer" type="System.Configuration.IgnoreSectionHandler, System, Version=1.0.5000.0, Culture=neutral, PublicKeyToken=b77a5c561934e089" />