I would like to know if it is possible to run multiple instances of IIS 7.5 on one operating system. My department is looking at taking our virtual environment that currently has separate development, QA and production servers (each with their own Windows Server O/S of course) and combining the those resources into a singled clustered environment. However, we would still like the ability to isolate the environments from each other by creating separate IIS instances but I'm not sure if this is possible.
No, you cannot. You can, of course, have multiple sites that have multiple URLs with their own application pools. But you cannot actually run multiple instances.
I'd really recommend keeping your QA and Test environments off of your production boxes wherever possible. You don't really want a runaway process from some dev code to lock up your whole server if it's running your production website, do you? That's the reason for separate environments in the first place.