What will be your preferred way of installing and configuring Wordpress on IIS 7.
- Would you prefer using WPI (Web Platform Installer)?
- Would you prefer manual download, install and configure PHP, mySQL and Wordpress?
It depends, if you want a quick way to install PHP, SQL and Wordpress, use the WPI, its fast and easy.
If you want to learn how to setup these things manually, do them manually.
There is no reason not to use the WPI if you want things setup quickly and easily.
Web Platform Installer makes it so easy to get all the pieces you need properly installed and configured that I can't imagine ever doing it manually again... Heck, even pretty Permalinks work right out of the box.
If I couldn't use WPI I'd probably resort to something like XAMPP instead of attempting your option 2.
I would recommend Web Platform Installer it is easy to install wordpress on IIS 7. Just few clicks and your wordpress blog is ready. Manually would take time in configuration and everything.