Configuring IIS for websites in a folder

Okay first, sorry if this is in the wrong place! I am actually using Windows Vista but I didn't think it would be relevant.

The Backstory: The problem is I have 2 domain names. They were set up to use URL forwarding to my IP address with URL masking. Problems with this, Google doesn't index me properly and sometimes the in the address bar the IP address is shown instead and was sometimes just dodgy. Basically, it didn't always work. So, I recently spoke to the support for the domain names and they suggested I set up DNS instead. They helped me through this and... it works.

The problem: When I go to my website I see it but it is index.htm in wwwroot. I need it to be wwwroot/cbr because I am hosting more than one website. I mean, it is possible, right?