This month's edition of MSDN Magazine has a great article giving insight into the features of IIS 7.0. Although Windows Server "Longhorn" is still some time away, Windows Vista actually ships with the same full-featured IIS 7.0 bits that are expected to be released in Windows Server "Longhorn." So you can start playing with it now!
I really like that the IIS metabase is gone. You can now configure all of the IIS specific settings through the hierarchy of web.config files side-by-side with your application configuration. This really simplifies deployment, configuration, backup and recovery.