If you are running into this…this is what got me past the install, and past all the permissions issues.

1. Download and Install the latest version (I installed the Source version so I can modify things and/or build themes (Portals/Skins).
2. I would also recommend using this Installation Helper Application if you are not too technical, or you just want to make things a lot easier!
3. After everything is installed, you will run the website either in the browser or from your Visual Studio, either way you will have to run the InstallWizard…and step 2 is where the Permission issues will start.
4. Go to the web root folder you designated when you installed it, Right Click, Properties –> Security tab –> Edit –> Add (these ‘users’ to the list)
   • IUSR
   • NETWORK SERVICE
   • IIS_IUSRS (yourmachinename\IIS_IUSRS)
   • DefaultAppPool (you’ll have to find it by typing in “IIS AppPool\DefaultAppPool”)
5. Make sure you grant Full Control to the Application in the Web.config and if you want to even to the AppPool Identity
6. If you still get the “your site failed permissions check” error after all this, you will need to go to IIS Management Tool –> Your Website –> .Net Trust Levels and change the Trust Level to Full.

I hope this clears some things up. I spent two days trying to get a local installation and everything I tried was failing…until the last step above.

Please let me know if this works for you, or if you did something else to get past some of the Permission errors.