If you are using WebDAV, you will likely get this error in the server log:
HTTP Error 500.21 - Internal Server Error
Handler "WebDAV" has a bad module "WebDAVModule" in its module list.
The WebDAV module will block both the DELETE and PUT (update) verbs for IIS.
You can either uninstall WebDAV or simply remove it from the Handlers of the site. One way to remove it is to add the following remove
lines to your site's web.config:
<system.webServer>
<modules>
<remove name="WebDAVModule" />
</modules>
<handlers>
<remove name="WebDAV" />
</handlers>
</system.webServer>
More details can be found here: http://forums.iis.net/t/1166025.aspx
-zc-