first try this right click on to the folder containing your application and click on properties->web sharing here specify the alias name like WebApplication1..this will make that folder virtual but this not seem to be the problem here because your application's name(WebApplication1) suggests that you have created the application from visual studio IDE..which creates the virtual folder for the application automatically.. I think that you need to reinstall your IIS as i think it has been crashed...please try that...service unavailable message usually shown under this situation..