Installation af DotNetNuke 4.x problem..

Hello, I can really not make this work & I think WHAT can it be that is speciel in my environment?

Maybe someone can help me out!? ;o)

My scenario:

SERVER:

* WIN2003,
* IIS 6.0 with virtual "DotNetNuke" library,
* .NET2.0,
* DNN4.x installed in "C:\DotNetNuke"
* "NETWORK SERVICE" account is set to read+write+modify on the "C:\DotNetNuke"-folder
* I have an "DotNetNuke" database in MS SQL v.8 with the user "NETWORK SERVICE"
* connection-string is corrected 2 places in the "web-config"-file with value="Server=MyServerName;Database=DotNetNuke;trusted_connection=yes;"

Client:

* WInXP Professional,
* .NET2.0,
* VS2005

RESULT:
* http://localhost/dotnetnuke/ = Error 400 The page cannot be found
* http://MyServerName/DotNetNuke/ = Error 403 You are not authorized to view this page
* http://MyServerName/DotNetNuke/Website/ =

------ error START ------
Server Error in '/DotNetNuke' Application.
--------------------------------------------------------------------------------

Configuration Error
Description: An error occurred during the processing of a configuration file required to service this request. Please review the specific error details below and modify your configuration file appropriately.

Parser Error Message: It is an error to use a section registered as allowDefinition='MachineToApplication' beyond application level. This error can be caused by a virtual directory not being configured as an application in IIS.

Source Error:


Line 61: </system.codedom>
Line 62: <system.web>
Line 63: <machineKey
Line 64: validationKey="F9D1A2D3E1D3E2F7B3D9F90FF3965ABDAC304902"
Line 65: decryptionKey="F9D1A2D3E1D3E2F7B3D9F90FF3965ABDAC304902F8D923AC"


Source File: C:\DotNetNuke\website\web.config Line: 63
--------- error END --------

What do I do wrong? And should these calls be made from the client or the server? I have tried both!

Thanx in advance.. ;o)