I've two intranet website but they're as folders under default website and so i would access as //server-internal/websitedirectory1/ adn //server-internal/websitedirectory2. Customers can't stand this. They would like to access with a few significant title like website1.intranet.com and website2.intranet.com. How do i accomplish this? Thanks.

You'll have a problem if both of these "sites" share session information. Test this by establishing two virtual folders.

You have to add multiple Internet Sites in IIS and hang them to reply to different Host headers (in Qualities)

You'll should also setup DNS.