Create a folder say c:\foo, give the network service account write permissions.

In web.config, add a <compilation tempDirectory="c:\foo" /> entry.  Now if MS had done their jobs properly that would be it, unfortunately Web Service serialization code is parsed to the system environment TEMP folder (or maybe TMP , I haven't quite managed to convince myself), so you need to add a global.asax and add this to the Application_Start

Environment.SetEnvironmentVariable("TEMP","c:\\foo"); Environment.SetEnvironmentVariable("TMP","c:\\foo");