If you just turn on IIS and run it you are vulnerable to known exploits. Apply the updates, configure and secure it and you should be OK, until the next exploit comes out.
Here's an article that looks interesting:
Checklist for Securing a Windows XP IIS 5.1 Webserver .
Please note that I did not read this in full and provide the link for informational purposes only.
Here are some links to Microsoft:
Secure Internet Information Services 5 ChecklistInternet Information Services in Windows XP SP1Internet Information Services (IIS) Security CenterHere's some general IIS info you should be aware of (obtained from XP Pro Help & Support center):
QUOTE
Note IIS for Windows XP Professional is designed for users developing a Web service, for home, or for office use. IIS Professional can only service 10 simultaneous client connections and does not leverage all the features of the server versions. IIS replaces the former default Web service, the Personal Web Service (PWS), on home and professional versions of Windows. PWS cannot be upgraded from previous Windows products.
If you have IIS installed, you can view the product documentation by typing
http://localhost/iisHelp/ in your browser address bar and pressing ENTER.
Lastly, be aware that running a server may go against your ISP's TOS (Terms of Service).