Windows XP and Commerce Server 2007

Commerce Server 2007 can be installed on windows XP but there are reason why you should stay away. Keep your development environment in the same configuration as your production it makes solving issues that much easier. Because Windows XP runs IIS 5.x you do not have the Application Pool as in IIS 6. To resolve this you will need to add an identity tag into your web.config to set username and password for the ASP.NET worker process. The Aspnet_setreg.exe tool encrypts the user name and password in the registry and this is the only change you will need to do in order for your web service and commerce site to authenticate correctly.

For further information please see this KB article: How to use the ASP.NET utility to encrypt credentials and session state connection strings