I've worked out how to interact with IIS 6.0, but I can't find anything on the net about how to talk to IIS 5.0 - if indeed it's even possible?
I would like to write a script to create a temporary application, so I can copy some ASP.NET files there, build them, and then remove the temporary application.
If needs be I am happy to call a third-party VBScript instead.
There use to be some installers on the ASP.NET downloads that would setup a project in IIS 5.0. I think it was the old ASP.NET Forums software. I know this wasn't an answer to your question.
If I was a betting man I would say they probably created a batch file that used the VBScripts. Because I remember a black window popping up to compile and deploy.
As far as PowerShell goes, I don't think there is any solution for integration with IIS 5.