XP's multi-tasking abilities are pretty limited, and you'd find out just how limited if you tried this.
Secondly, not only is IIS a huge security hazard that should be avoided at all costs, it's a real beast to configure. Even pros have problems with it, which is part of why it's such a security hazard.
What I would suggest you do, is find or buy an older Pentium II box sitting around or on eBay. You can get these things for next to nothing these days. Then you slap a copy of Linux on it, and use Apache as the web server. You can download CD images for free off the Internet, and you're free to use it. Windows has some restrictions on the number of connections you can legally have to your computer at a time. I think XP Pro is 10, and IIS will enforce this. Apache on Windows won't, but Apache on Windows is a pale shell of what Apache on Linux or *BSD is. Just because of the limitations to Windows' multi-tasking abilities. Not to mention IIS doesn't always want to play nicely with browsers that aren't IE, and also for security reasons, you really don't want to be using IE any more than is absolutely necessary.
Anyway, you can find loads of documentation on the Internet about using Linux as a web server. There are even distributions specifically tailored to these sorts of things. Some probably don't even require much Unix knowledge, though a little can never hurt. This way it won't be hogging huge amounts of resources on your main system, if someone hacks into it, it's not your main system they're trashing, and server performance won't be affected by you playing a game or something like that.
Also, one final little note. You've got it backwards. It's 7Mbps (note the lowercase b, since that's significant here, meaning bits instead of bytes) down and 876Kbps (again, lowercase b) up. And a bit of free advice for which you can take as you will... Get rid of that McAfee stuff. Anything with the McAfee name on it is all but guaranteed to be crap. VirusScan will consume huge amounts of CPU time, and absolutely kill your server performance, and software firewalls are next to worthless no matter who makes it.
I would like to set-up my own web server using Windows XP Pro. I know IIS comes with the software. I am a novice in this particular area but want to learn. I consider myself technology proficent and can learn quickly. Yes, I know I can hire someone to do the hosting, etc. but you don't learn that way.
My CPU is a AMD Athlon 2800+ with 512MB ram and a 80GB hard drive. I have a DSL with 7MBps up and 876KBps down and 5 static IPs. I also have McAfee Security Center installed which includes Firewall Plus and Virus scan. I also have my own domains. My plan is to host my own website plus 2 others. There will be no e-commerce or anything too heavy duty. So, that's the background stuff.
I need your help and advice on where to get easy step by step best practices to set up the server. A book is good, an online tutorial is good, and a CD Rom is also good. I would rather NOT spend 5 days in a class. At this point I am open to almost anything else. I have looked for a good book but nothing that gives me good step by steps.
Any help would be appreciated. Thanks in advance!