Hi Shaun,
I'm in the process of setting up a Win 2008 machine for testing, but need to order a new network card as it doesn't have drivers for the one I have. So I'm not yet able to test on Win 2008. Nevertheless, I am working every day on Vista with IIS 7 and it should be the same.
I think what you need to do is ask the server admin to configure the site with a "Classic" app pool. IIS 7 offers 2 different kind of application pools "Integrated" and "Classic". Integrated is new and Classic is more like the way things have worked before. I've done some testing here with integrated mode and had some success, but some things don't work right. I think once I upgrade to the newer version of NeatUpload (which supports integrated mode) it may solve the problems under integrated mode, but for now, it works fine with Classic.
Hope it helps,
Joe