A typical AxCMS.net installation on one server would need 3 web sites or 3 virtual directories in IIS:

• for MS (/AxCMSweb_MySite)
• for LS (/AxCMSwebLive_MySite)
• for Publish Services (/AxCMSPublishService_MySite)

Good news: you can come up with only one virtual directory and nesting the other stuff below:

• The LS runs in the root virtual directory ("/MySite")
• MS resides in a subdirectory ("/MySite/MS")
• PublishService resides in another subdirectory ("/MySite/Publish")

A typical issue in such configuration is the inheritence of the web.config parameters (you have one web.config in the root directory and one in MS or Publish subdirectories). The sub-applications might try to use some of the root web.config parameters, which leads to confusion. To avoid that,  you can put the most keys on the LS web.config into the location-element and turn off the inheritance, here is an example:

<?xml version="1.0" encoding="utf-8" ?>
<configuration>
             <configSections/>
             <location inheritInChildApplications="false">
                <appSettings/>
                <system.web/>
                <system.webServer>
            </location>
  </configuration>

If you wish more details, please contact me.