This error occurs a lot on a Windows XP machine when running websites. This is because Microsoft have built in a limit of 10 connections into the XP IIS.
This limit can be bumped to 40 connections by using the ADSUTIL.vbs script.
The script is located in your C:\WINDOWS\ServicePackFiles\i386\ folder.
To bump the connection to 40, use the following:
adsutil set w3svc/MaxConnections 40
You can also disable the HTTP Keep-alives in your IIS. It reduces performance but since your machine is a developer machine anyway it probably doesn’t matter.