Resources:

Run ASP.NET with command prompt: http://www.dotnetperls.com/development-server-bat
Run ASP.NET with command prompt: http://www.codeproject.com/Articles/166319/Run-ASP-NET-Web-Application-from-Command-Prompt
Installing and Configuring WebDAV on IIS 7: http://www.iis.net/learn/install/installing-publishing-technologies/installing-and-configuring-webdav-on-iis#001

My method:
Actually to run the asp.net web application you do not need Visual Studio to be installed on your computer. You just have to make sure IIS 7.0 is installed properly with all the required features, firewall is not blocking and have proper permission to access the application.

Install IIS 7.0 and webdav server
Using Turn windows features on or off - Install IIS feature
Copy the Website folder to C:\inetpub\wwwroot\
IIS Convert to application
IIS Application pool settings
IIS Authentication to website
Firewall configuration
Website folder permission

Method 1:

The ASP.NET Development Server tests sites locally. We can start it from a .bat file. Many other guides are slightly confusing or incomplete. We see screenshots and a list of steps to take. We manage the development server with ease.
Get started

Here we are starting with a Web Site project in Visual Studio 2008. Its location is the File System, and its language is Visual C#. When you are in Visual Studio and click the green arrow, the site should run correctly.
Create new .bat file. On your Windows desktop, right-click and select New > Text Document. Rename the file so that its complete filename is "example.bat". This is a small program that we will use to start the ASP.NET Development Server.
Add code to .bat file. In the .bat file, you need to add two lines. The first line tells Visual Studio's environment to start up in the background. This line must contain the path to "vcvarsall.bat", which is in your Program Files directory.
Also:The second line invokes the WebDev.WebServer.exe application, and you can pass it the path to your web site's folder. In the following example, replace PATHSITE with the path to your web site folder.

Code for .bat file:

call "C:\Program Files\Microsoft Visual Studio 9.0\vc\vcvarsall.bat"
"C:\Program Files\Common Files\Microsoft Shared\DevServer\9.0\WebDev.WebServer.exe"
/port:3900 /path:"PATHSITE"

The PATHSITE string is the path to your web site's folder, which contains your Default.aspx file, your App_Code folder, your App_Data folder, your Web.config, and other files. There is no actual EXE in this folder. My path is "C:\Users\Sam\Documents\Visual Studio 2008\WebSites\ExampleSite9".

Double-click on the .bat file. Here we need to run the .bat file by clicking on it. After you do so, you will first see a command prompt window, which you can ignore. In the bottom corner of your screen, you will see the System Tray and a balloon pop up.
Right click on the little page icon with the tiny gear and select Open in Web Browser. Your default web browser will open up and the Default.aspx page in your site will be executed.

Program icon

Method 2:

Run ASP.NET Web Application from Command Prompt

By Abhijit Jana, 8 Mar 2011

Prize winner in Competition "Best ASP.NET article of March 2011"

Visual Studio has its own integrated ASP.NET Runtime engine, which helps to run any ASP.NET web application within Visual Studio. While running application from Visual Studio, you must have seen a popup notification in System Tray (as shown in the below image), which is a notification of ASP.NET Development Server.

This ASP.NET Development Server is nothing but an executable file (WebDev.WebServer) which used by Visual Studio to execute you web application when it’s running in the context of Visual Studio. You can find the executable file at<\Program Files (x86)\Common Files\microsoft shared\DevServer\10.0>. This folder contains two different executables:

WebDev.WebServer20.EXE
WebDev.WebServer40.EXE

WebDev.WebServer20 is targeted to CLR 2.0, which means all the ASP.NET applications which are targeted till FW .NET 3.5 will be taken care by WebDev.WebServer20.EXE and WebDev.WebServer40.EXE for ASP.NET 4.0 based application.
Now, let’s see how we can use these executables to run an ASP.NET 4.0 application without using Visual Studio. Surprised smile

Step 1: Open the Command Prompt for “Program Files (x86)\Common Files\microsoft shared\DevServer\10.0”.

Easiest way to go there, type Cmd in the address bar (If you are using Win 7), this will directly open command prompt with exact path.

Source for this cmd Tip: http://twitter.com/#!/pbrooks/status/35734806549495808 Thumbs up

Step 2: [Optional] Type WebDev.WebServer40 and Press Enter, this will open a popup window with the details of required parameter.

Step 3: If you are done with review, type below command in your command prompt:

Note: Port number should be valid and not be used by any other process and path is location of your published web apps.
Step 4: Once done, press Enter, you will see a pop up notification in system tray.

If you double click on that icon, you will get the below window of ASP.NET Development server, which is exactly the same notification window which we used to get when we run some ASP.NET application from Visual Studio.