That does not work. As soon as I put C:\ColdFusion10\cfusion in the Server Home I get the error Server Home Invalid. I have uninstalled Coldfusion 10 and re-installed added the latest updates. Coldfusion 10 is working fine running on IIS 7.
With Coldfusion 9 this worked fine with IIS 7.
With Coldfusion 10 , since you have C:\ColdFusion10\cfusion\wwwroot. as the Document root will this only work if you install the included web server?
With Coldfusion 9 I may have installed the included web server first and added the IIS configuration later but I have slept since then.