Hi,
did you change the Name for the Virtual Directory from 'Processmanager' to anything else?
Because you will be asked twice, once in the SD7 Setup (but only when you check to show the Advanced Settings) and then the post Install wizard will also ask you. Make shure they match, or leave the default 'Processmanager' than it should work. You could make another Virtual Directory on the IIS and redirect it to the Processmanager.
Hope that helps.