Hi,
As stated you will need to use a web server, such as IIS (which may already be installed, check under admin tools).
Alternatively you can use one of the free webservers available for download.
To address your point of http://localhost.
SO on your PC you have a few ways of resolving names, ( depending on how your system is configured will determine the exact order these lookups happen) basically when you tell your PC to connect to a name it needs to find an IP address to connect to.
It will look in some files on your PC, they are the hosts file (holds DNS resolution information) and the LMhosts file (holds wins information). If it cannot find an entry for the name you want in either of thes eit will then go to your configured (Local) DNS server and ask it for an answer (called an "A" record resolution". This is what happens when you type in www.yahoo.com).
By default your hosts file has an entry that looks like:
127.0.0.1 local hosts
That tell your pc that whenever someone goes to localhost, actually they are asking for 127.0.0.1.
(open a command prompt and type ping localhost )
I won't go into the intracacies of ip addressing but suffice to say 127.0.0.1 means this local machines network interface (nic card)
Interestingly a browser connects to port 80 by default, (or port 443 for SSL).
So what you are actualy asking your computer to do is to connect to port 80 (the webserver) on my own network interface (or TCP stack for the sake of accuracy), and this then hands the request to your webserer which lives on port 80.
Hope this helps
Owen