1.
Before you start creating applications for the Cloud you must first
download the Windows Azure Tools for Visual Studio. This can be found here.
2.
You also need to install and configure IIS 7. You need to be running
Windows 7, Vista, or Windows Server 2008. Click here to read
the instructions on setting up IIS 7.
3.
Now that you've installed IIS 7 you can install the Azure Tools by
running the VSCloudService.exe file that you downloaded in Step 1.
4.
Once the Azure Tools are installed you need to install the hot fixes.
Depending on your operating system you'll need to install different ones. They
can be found here.