To create a self signed certificate on Windows 7 with IIS 6...
Open IIS
Select your server (top level item or your computer's name)
Under the IIS section, open "Server Certificates"
Click "Create Self-Signed Certificate"
Name it "localhost" (or something like that that is not specific)
Click "OK"
You can then bind that certificate to your website...
Right click on your website and choose "Edit bindings..."
Click "Add"
Click "OK"
Click "Close"