# proper way of adding new php application to iis7

I have working IIS7 with PHP on my computer - localhost.
I have a couple of applications that are working fine. But now I want to add a new one and for some reason I always get a 404 error on the php page. I am probably missing some basics.

What would actually be the recommended way of adding a new directory under my C:\inetpub\wwwroot (for example C:\inetpub\wwwroot\mysite) so that it appears and works under http://localhost/mysite?

Should I first copy the files to C:\inetpub\wwwroot\mysite and then create a new Application or Virtual Directory (what is actually the difference between them) under Default Web Site?

I think I have done it this way so far and it was fine, but now I have stumbled upon one site (WordPress folder structure BTW) which says Invalid application path when I try to add an Application under Default Web Site.

Actually I get Invalid application path if I try to just add an empty folder under Default Web Site, when I specify it as Physical path. Maybe that's the real problem here...?

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