I could not get Vista Beta 2 IIS 7 to recognize the .SVC file either. I have been hunting for two days for a solution. My thanks to Ed who posted the answer:
C:\Windows\WinFX\v3.0\Windows Communication Foundation\servicemodelreg.exe -i
The problem is missleading in that it really has nothing to do with a MIME type, rather IIS 7 needs to launch the proper handler for the file type (.svc). I use Visual Studio 2005, and I created a WinFX service using the defaults but it would not work - now it does!
I hope Microsoft will get this into the final build so that Visual Studio can create web services in WCF without so much hassle.
Larry Aultman, Tallahassee FL