One nice feature of IIS7 is that you can now have an unlimited number of sites on a box. IIS doesn’t impose an upper cap on the number of sites that can be configured on a box.
Nevertheless, one has to regard to performance and connection limits, IIS has many configurable parameters that can be changed to suit your particular needs.
Here are a few performance related tunings that you can make to help performance and host more sites on your IIS7 server : http://blogs.iis.net/mukhtard/
Configuration to host more than one Web site on a Web server:
To host more than one Web site on a Web server, you can assign a unique IP address to each Web site, designate a non-standard TCP port number for a Web site, or use host headers. Of the three methods, it is more common to use host headers than to assign unique IP addresses to Web sites or to use non-standard TCP port numbers.
To configure a host header for a site
- Open IIS Manager. For information about opening IIS Manager, see Open IIS Manager (IIS 7).
- In the Connections pane, expand the Sites node in the tree, and then select the site for which you want to configure a host header.
- In the Actions pane, click Bindings.
- In the Site Bindings dialog box, select the binding for which you want to add a host header and then click Edit or click Add to add a new binding with a host header.
- In the Host name box, type a host header for the site, such as www.contoso.com.
- Click OK.
- To add an additional host header, create a new binding with the same IP address and port, and the new host header. Repeat for each host header that you want to use this IP address and port.
Read more about it here: http://technet.microsoft.com/