There is a bug in the IIS7 Web Dav Module shown below

The bug is that if you have a file or folder with an ampersand “&” character it will cause an error when using Windows Explorer. We installed this on a Windows 2008 Server 32 bit version at work and opened it up to users.
When a user browsed a folder with a file or child folder that contained an ampersand they received the following message
The fix is to either install WebDav 7.5 for IIS 7.0 or to install a hotfix. This hotfix rollup resolves the following issues that occur when you use the WebDAV module for IIS 7.0:
- The PROPFIND responses are truncated at 4 megabytes (MB).
- Some characters are not escaped correctly in the PROPFIND responses.
- Virtual Directory enumeration does not work as expected.
- Plus signs are converted to spaces in PUT request URLs.
- The WebDAV handler mapping is not added when you reinstall the WebDAV module.
- Request filtering settings are not configured when you enable WebDAV by using the UI.
A hotfix rollup is available for the out-of-band WebDAV module for IIS 7.0
http://support.microsoft.com/default.aspx/kb/957001
WebDav 7.5 for IIS 7.0 Module : 32Bit Version
http://www.iis.net/downloads/default.aspx?tabid=34&g=6&i=1621
WebDav 7.5 for IIS 7.0 Module : 64Bit Version
http://www.iis.net/downloads/default.aspx?tabid=34&i=1618&g=6
WebDav 7.5 for IIS 7.0 Documentation
http://go.microsoft.com/fwlink/?LinkId=105146