mmm This is a brief outline of that you can do, but it is not going to be all that friendly. I am not a fan of using IIS, you need too many other things to make sure that PHP works in it, and for me, the technology falls over too often for comfort. I am also very dubious about the usefulness of Moodle for Windows installer package so I will outline a full WAMP installation.
Log in as Administrator, not as you with Admin priveleges - for some reason, this will not work otherwise, probably an "undocumented security feature" for Windows 7.
1. Clean everything installed out. Delete the whole lot. Leave nothing. If you created a restore point, use it.
2. Stop IIS from loading, permanently. You do not want to have that interfering with your server.
3. Reset UAC to minimal. This "security feature" is for lazy or inept people who have no idea of what they are doing with regard to the security of their own computer. If you are contemplating doing this, then you are certainly not either.
4. Look for installation videos and instructions on YouTube and elsewhere for installing Apache, PHP and MySQL in windows 7. Try to understand what they are doing, even if you need to use a number of different videos to get an overview.
5. Install Apache, and then test it. Make sure it works before going to the next step.
6. Use the PHP *.zip file NOT the PHP *.msi and follow instructions carefully about adding it to your Path and the php.ini file. Add the location of the PHP folder to the Apache http.conf file and the php dll to the LoadModule and DirectoryIndex settings. Then test using a file you create like "info.php" (it has three lines):
<?php
phpinfo();
?>
If PHP is installed properly, you should get the PHP information file, it is long and sets you on the way to successfully completing the whole process
7. Go through the Moodle administration documentation here about how to set up the php.ini file to suit Moodle.
8. Install MySQL, make sure you are creating a database that uses a UTF-8 collation. Also, you are not setting up a database developer's system, so be careful about which options you select there. Make sure you know what the "root" password is, without it, or not remembering it, or get it wrong, and all this effort will be wasted.
Test everything as you go. DO NOT install the next part without making sure what you have is working. PHP will not interfere with Apache, MySQL will not interfere with PHP or Apache.
Download from Moodle.org a Standard version - NOT Moodle for Windows. The Moodle for Windows will wreck your current AMP setup, so make sure you get a Standard version.
Install Moodle as normal making sure the MySQL password is the same as the "root" password you put in when installing it.
As an obsevation, I have used this configuration in XP and Windows 7 and been able to install MediaWiki, WordPress, Elgg, phpBB and other PHP apps for testing as well as, at one point, 4 different versions of Moodle. I have had no problems with the server except when I tried to upgrade PHP in a rush and made a mess of it.