I hate to post my own answer, but some answers recently have ignored the solution I posted in my own question, suggesting approaches that are nothing short of foolhardy.
In short - you do not need to edit any Windows user account privileges at all. Doing so only introduces risk. The process is entirely managed in IIS using inherited privileges.
Right-click the domain when it appears under the Sites list, and choose Edit Permissions
Under the Security tab, you will see MACHINE_NAME\IIS_IUSRS
is listed. This means that IIS automatically has read-only permission on the directory (e.g. to run ASP.Net in the site). You do not need to edit this entry.
Click the Edit button, then Add...
In the text box, type IIS AppPool\MyApplicationPoolName
, substituting MyApplicationPoolName
with your domain name or whatever application pool is accessing your site, e.g. IIS AppPool\mydomain.com
Press the Check Names button. The text you typed will transform (notice the underline):
Press OK to add the user
With the new user (your domain) selected, now you can safely provide any Modify or Write permissions