One basic approach for setting up a dev team is to use a database that all developers can reach, but each developer runs their own IIS site locally. VPP:s and other shared files are generally a problem because for the DB and files to stay in sync you have to have the files on a network share and in my experience there are often problems with domains, accounts and security preventing that. In these cases we've used local VPP folders and just coped with image links being broken because the file was uploaded by someone else to their VPP.

The approach I prefer is using an environment with continuous integration and a separate dev server which the project is continuously built to. Developers can still have their local environments, either connected to the same database, but preferably with individual databases (to keep dev "pure" and a first stage of testing). The dev server is kept as a common testing ground (but still using a second staging environment for final release tests) with daily builds.

A hybrid commonly used when CI is not used is using a common dev server but manually publishing new builds to it. You can also share the DB with local dev environments and keep the dev server VPP as a "master" (i.e. never upload or change files in the VPP in local environment, always do it on the dev server, and from time to time copy the VPP from dev server to your local environment if you want working images etc).

There are probably many other ways to set this up as well, and all solutions have different amounts of required set-up time and knowledge and post set-up annoyances.