Microsoft Network Load Balancing (NLB) is a very simple service. It distributes requests to the specified ports according to the configured weightage. It does not respond to the load on the nodes. It does however disable non responsive nodes within 5-7 seconds.
The FAQ on the NLB service is available here.
There are however several caveats.
Using NLB on a single NIC can have some problems. The hosts can’t see each other inside the manager.
A cluster that has at least one Windows Server 2008 node should only be managed from a computer running either Windows Server 2008 or Windows Vista® using Remote Server Management Tools (RSAT).
Configuring NLB for dual NIC. Using this method however will require substantial network redesign. It implies that the SQL servers need to be on a different subnet. The SQL servers in most cases are already operational, so are your users. The only way out is create a new subnet for your web hosts. ARrrggh.
Configuring NLB for single NIC