IIS Express unable to create the virtual directory

You should be able to accomplish this in one of two ways.

• You can remove the old project, or change its port using WebMatrix, which has an administration interface for IIS Express.
• You can also do it by hand, by modifying the applicationhost.config file directly. The file is located in the %userprofile%\documents\IISexpress\config folder. You can find the project configuration under the <system.applicationHost>/<sites> element.

UPDATE:
WebMatrix has been discontinued and support has officially ended.