aspnet_wp.exe could not be launched because the username and/or password supplied in the processModel section of the config file are invalid.
Most of the hits on this site are from Google for some variant of the above sentence. I'm mentioning here again to save people searching the site archives.
This Microsoft support article explains the problem I had with configuring ASP.NET. Interesting to note that they suggest changing the account to SYSTEM without mentioning the potential security issues with that account. I chose to use SYSTEM on my dev box but its probably not recommended for a production server (well, a production server should not be a DC anyway).