I like to use HTTP as opposed to FTP when I'm working on my web sites in Visual Studio 2008. My server is in house and running Windows Server 2008 with Internet Information Services version 7. It does not natively support Frontpage Server Extensions. Ready to Run software has FPSE available as a free download.
I downloaded and installed it on my server following all of the rules but was getting the dread "this site does not appear to have Frontpage Server Extensions installed." One of my sites (a DNN installation) was responding properly. The two others I have were not. After several days of head scratching the remedy turned out to be super simple. Sites in IIS7 are set with the Default App Pool as the default. I switched the sites to Classic App Pool and everything came alive.
So if you try to install FPSE on your Windows Server 2008 box (or Vista) keep in mind that FPSE likes a Classic App Pool.