If your Sitefinity installation is running OK without generating error logs its function is not affected.
The project manager has several options for creating projects - local file system, local IIS, and remote location (either using FTP or HTTP). To create projects on remote location through HTTP the site should support FrontPageExtensions. Whenever you create projects, at the screen where you choose project name you can click the Browse button and from the popup select Local IIS and choose an IIS site or Virtual Directory to create the project to. Problem when manually creating the site on IIS seems to be related to missing handler mappings to ScriptResource.axd and WebResource.axd.
If you have hosted Sitefinity in a virtual directory under (your database name),
could you please make sure that it is configured as an application?
Also please take a look at this article
and in you experience other problems with virtual directory there is a KB
available with common virtual directory errors.
Please write back if you need further help.
the Telerik team
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