Is the first site a root level site? It must be for folder sites to work.
The Site2 folder may not be needed at all, however if it is needed it does not go below /Data it must be a folder directly below the root of the first site. The only purpose of that folder and the empty Default.aspx file is to make sure .NET is the handler for the request and to prevent IIS from returning a 404 before mojoPortal can handle the request.