In IIS 7.0 the sites run under the security of the app pool, as in previous version but in IIS 7 there are some hidden users ( for lack of a better term) that are the same name as the app pool
This site explains it.
http://learn.iis.net/page.aspx/624/application-pool-identities/
I found the part in Securing Resources area the most helpful
BUT, that wasn't all, I also Had to add theIUSR, once I did that the error went away..
IMO, I found the Linux references completely unhelpful and only unnecessarily weighted down this thread .