I just went through the pain of this myself last week. Here is what I did. (I
don't pretend to think it is best practice however.)

- using SPD (SharePoint Designer), at the root of my site I copy over my static
pages
- turn on AA (anonymous access) from the CA (central admin) for the site
collection
- enable AA in the site from Site Actions, remember once you turn on AA that all
sites in that collection will have that option now
- I had issues with SSL errors so I moved my CSS files to the root where the
HTML were..it was just easier and got mgmt off my back
- images are stored in the
- in SPD, I have an 'images' folder. Put your images there. Not sure how they
relate to the folders in IIS.
- create sub-site at root level and assign permissions
- back in SP, set the default  'welcome page' to our static new home page

Seems to work. Let me know what you find out works for your setup.

I just have a few questions
that I hope you can answer to give me better clarity:

???? "- using SPD (SharePoint Designer), at the root of my site I copy over my
static pages" - Where in SPD did copy them too? A new folder you created? Over
write default.aspx? Did you create a CSS folder and an images folder separate in
SPDesigner and copy stuff here? What did you do with the default.aspx page  the
was in existence?
It's a public facing site and AA is already on so I can skip that stuff! Yeah
Me!
It's in its own Site Collection already so I am good there! Yeah Me Again! LOL!
I currently do not use SSL's nothing to protect in transmissions yet! Yeah Me
Again! LOL!
I put the CSS in the page itself for now I will worry about separation in phase
II but I have done this for our intranet, you just add your CSS file  in the
12Hive.
?????Images are stored in the, store them in the SPDesigner images folder, if I
do this they go in the DB for storage with the page content stuff, but if I
stick them in the 12Hive layouts folder I will get a performance boost! I guess
I will think on this one.
?????Create Sub-site at root level and assign permissions, I have to ask why?
[My root site is the one I want to replace the default  page on?]
?????" - back in ??SP??, set the default 'welcome page' to our static new home
page" DO YOU MEAN SPD? Does this have any effect when creating sub sites b/c of
site definitions & templates stuff; since I want to swap out root site
default.aspx? Can you give me the specifics for this step?

As for moving the static files over, I literally drag and dropped from my open
file manager that showed my 5 or 6 HTML files to my open SPD of my site at the
root level. So, the default.aspx was there and my 5 custom static HTML pages.

I could not figure out the mapping to the Style Library where I wanted to put my
custom css. Since I only had one, I placed it in the root too. I did not try
creating a custom folder. I had some success with using the files in IIS but,
the SSL didn't like that and was prompting for every reference etc. For images I
used the directory that SPD revealed.

The default  "welcome page" is set from the web browser as you are logged in as
your site collection admin. From the home page, Site Actions >> Site Settings
>>Modify all Settings (see column) Look and Feel >> Welcome Page.

Again, put this down as the duct tape solution. I'm sure Paul or one of the
other experts are just biting their tongue in sheer pain. It's a learning
process.