Issues when you upgrade WordPress plugins and core on ISS 7.5
I have had lots of issues with upgrading WordPress plugins and the core WordPress engine on my IIS 7.5 server. The problem has been that you try to upgrade the plugin, you get a fail notice AND the plugin is simply disabled and you lose permission to the folder where the plugin was located. Then you must wait for a couple of hours until you can reinstall the plugin.
When you Google this you find post after post suggesting you add IUSR users and stuff and give them write permission and while you probably have to do that it was not what was causing this issue.
The problem is the WinCache plugin that IIS uses to do some caching stuff with PHP. I finally found this thread that explains the issue and points you to an upgraded version of the PHP extension.
After installing that new DLL everything worked as expected for me at least.