IIS7 & permalinks

I followed these directions:
http://learn.iis.net/page.aspx/466/enabling-pretty-permalinks-in-wordpress/

Permalinks are set for custom settings:
/%category%/%postname%/

If you scroll to the bottom of http://www.judsonsart.com/blog/ and click on “older posts”, the same content will appear.

If I change to the default settings, such that pages are identified as ?p=123, clicking to older posts works just fine.

Any suggestions how to resolve this? Thanks.