Is TeamSite 6.5 SP3 compatible with IIS 7.0? I can't find any information on this.
Formally no, see 6.7 SP1 and Below Platform CompatibilityNote that some of it will work. You may have problems though with VFE, VA and Java Applets like Import, Compare etc
I think the only thing IIS (the "customer web server") is used for is Preview - VFE, Import, and Compare / Merge would be handled via iwwebd [Apache] - I'm not positive about VA, as that involves a sense of Preview along with the annotations, which then get stored as EAs on the file.The primary issue is getting the virtual directory and anonymous access working so that the requests to/from/through IIS can access/interact with the TeamSite content store.