Simon says: "the ASP.NET web services are actually built on top of something called the HTTP pipeline, and there is an ISAPI filter/extension that puts requests into the HTTP pipeline from IIS. Although this is the only thing that ships out of the box, you can write code to host the HTTP pipeline yourself."

This is so true. I've seen at least one example of this that worked with Web services. Basically, you just have to:

1) listen for an incoming request using System.Net.Sockets
2) parse the request enough to create a System.Web.Hosting.SimpleWorkerRequest and then pass that
3) to a created an application host, and then
4) send the response back from the application host

In general though, I would expect to see samples of this you can download. Maybe there already are some out there.