Live Smooth Streaming with Expression Encoder 4

I have created a handler under the Default app pool to manage .isml extensions. In the connections pane I clicked on my handler -> live smotth streaming publishing points and added a new publishing point.

In Expression encoder when i try to set the location of the publishing point ashttp://localhost/MyLiveStreamHandler/MySmoothStream.isml and press connect I get the error: ""Server needs to be at least iis 7.0 with IIS Media Services 3.0" Although I have IIS 7.5 and media services 4.1 installed.

Note: Live smooth streaming works fine when I added the the publishing point to the Default app pool right away and not my handler.