<add verb="*" path="*.js" type="ScriptHandler" validate="false"/>
<add verb="*" path="*.css" type="CssHandler" validate="false"/>
You also have to make sure that the IIS lets the ASP.NET ISAPI filter handle files with .css and .js extensions.
The classes use regular expressions to remove whitespace and comments. Then it caches the cleaned file and adds a dependency to the real .css/.js file on disk. Every time you change the source file, the cache reloads.