I haven't tried this myself, but there's a piece of software called MultiSite Filter Version 2 which claims to being enable multiple website support (simultaneous) in Windows XP / IIS. How it might pan out with EPi... no idea. :)
My take on it as that you suggest upgrading to Win7 or run Windows Server 2003/2008 in a virtual environment (VirtualPC or VMWare) where they can do all their awesome EPi-deving. :)
You can go for Mutiple virtual directories within a single website and create separate apllication pools for that to improve the performance.
My client is running Windows XP Pro with IIS6. They need to develop locally, and have multiple sites in EPiServer.
IIS6 only allows a single Web site. Is this possible?
Any attempt to run two EPiServer sites through the same IIS site results in:
Application is initialized with settings for siteId="Site1", but current request maps to siteId="Site2"
If this won't work, then is it possible to have multiple sites in Cassini?