ok i just installed VS.NET and I want to know the "proper" way to make an asp.net application...

I have 2 machines in my room. one is windows 2k advanced server. It has IIS 5 installed and has the .NET framework sp2 installed.

the other is my development machine and has xp pro vs.net installed with sp2 on the framework as well...

now I want my server to host the application obviously... so when i load up VS on the client... and select new ASP.NET application it asks for a dir... what should i select here? Someone told me all you have to do is dump your pages in a folder on a machine that has IIS and the .NET framework installed.. but i would imagine you would have to set up a site of some sort right?

I have done this with old ASP using InterDEV but it seems a little different..