There are several problems with Cassini, most common problems are limiting maximum concurrent connections and lack of SSL support. There are also security issues related to the way Cassini operates in a privileged account, so if the application submitted by Cassini is compromised, the attacker gains control of the entire system.
If you need to host an intranet application, these problems probably don't matter much. However, another feature missing from Cassini is the entry, which in my opinion is important even for intranet applications. This devx article discusses how to implement your own journal by distributing Cassini source code yourself, but there are other problems if it isn’t done "right."
Comet Way, the company I'm working on, is creating a product called Neokernel Web Server , which is a secure, professional, ASP.NET that is designed to be implemented in .NET applications. Like Cassini, Neokernel runs any ASP.NET web application that runs in IIS and fixes the above issues. It has functions to solve other problems with embedding the web server in your application, for example, starting / stopping the server programmatically and APIs for expanding the server using its own request processing code. It is not based on Cassini source code. Maximum parallel connections (and many other parameters) can be specified through XML configuration files. Neokernel Web Server is a commercial product, but a free evaluation license is available.