Okay, I'm a total newbie to this, so my findings may be wrong, but this is what I found out.
The manual says "do not have spaces in the path (like C:\Program Files\PHP) as some web servers will crash if you do". Indeed, when using this with PHP5 on WinXP, I got the error message "The specified module could not be found."
However, the problem seems not to lie in the SPACE in the pathname, but in the QUOTES that Windows adds when a space is in the pathname! This is what I found:
"C:\Program Files\php5\php5isapi.dll" -- doesn't work
C:\php5\php5isapi.dll -- works
"C:\php5\php5isapi.dll" -- doesn't work
C:\Progra~1\php5\php5isapi.dll -- works
"C:\Progra~1\php5\php5isapi.dll" -- doesn't work
C:\Program Files\php5\php5isapi.dll -- doesn't work, because it's not accepted by Internet Information Services
I don't know if this all is a problem with Internet Information Services or with PHP, but it would be nice if it was more documented in the PHP manual.