A virtual directory is a directory name that you specify in IIS and map to a physical directory on a local or remote server. The directory name then becomes part of the application's URL, and users can request the URL from a browser to access content in the physical directory, such as a Web page or a list of additional directories and files. If you specify a different name for the virtual directory than the physical directory, it is more difficult for users to discover the actual physical file structure on your server because the URL does not map directly to the root of the site. In IIS 7, each application must have a virtual directory, which is named the root virtual directory, and which maps the application to the physical directory that contains the application's content. However, an application can have more than one virtual directory.

Creating Virtual Directory in IIS7 

• Open IIS Manager.
• In the Connections pane, expand the Sites node in the tree, and then click to select the site in which you want to create a virtual directory.
• In the Actions pane, click View Virtual Directories.
• On the Virtual Directories page, in the Actions pane, click Add Virtual Directory.
• In the Add Virtual Directory dialog box, type a name in the Alias text box. This alias is used to access the content from a URL.
• In the Physical path text box, type the physical path of the content folder, or click Browse to navigate through the file system to find the folder.
• Optionally, click Connect as to specify credentials that have permission to access the physical path. If you do not use specific credentials, select the Application user (pass-thru authentication) option in the Connect As dialog box.
• Optionally, click Test Settings to verify the settings that you specified for the virtual directory.
• Click OK.