I must say I never used it because of verious problems
1) Switzerland .ch and Germany .de speak both the same language and therefore I rather have it /de (Deutsch/German) for both. You could acutally use de-CH and de-DE but then you would have two pages that maybe are synced but this I did not like
2) France does not allow you to register an .fr domain unless you live in France or have a business there
3) What about .com and .eu domain? To what language would you point them?
So I usually use the /de /fr /en option and point all site to the main page and let the user choose.
I don't even know if SF looks for browser settings to show the corresponding language if available (maybe a feature request)
This said I would not think that you would have to configure anything in IIS
But of course you would have to restart your app most probably.
I assume you did get the textboxes for different languages to be matched to the URLS.
I often work on a production server copy to avoid fiddling around with local settings. And if it works in the staging (production) area it most probably will in production.
I don't think that you could test this localy anless you use a hosts file.
Can you make a screencast www.jing.com
and show us how you did set your languages.
Have you set the domains with your hoster to point to this site?
What happens if you enter an .eu .sz domain