Yessir, that new ClickOnce deployment is quite sweet, like a Vermont Strawberry in July.
You may receive File Not Found 404 errors on .manifest, .application, .deploy and other ClickOnce-specific filetypes after clicking that magical [INSTALL] button on the web page ClickOnce creates. The documentation says IIS supports these filetypes automatically with the installation of ASP.NET 2.0, but that hasn't been the case for me. You'll need to go into IIS and add the mime-types before experiencing ClickOnce Love.
.application --> application/x-ms-application
.manifest --> application/x-ms-application
.deploy --> application/octet-stream.
anything else --> application/octet-stream
IISRESET.
[insert longneck bottle of Budweiser or your personal metaphor for a big red heart with arrow through it here...]