I do not know if you say this with experience but I give complete control to IUSR_ServerName in the moodledata/temp folder and nothing happen!
I obtain the result of showing correct formulas (write in tex language) only giving write permission to IUSR user in the cmd.exe file.
But is not possible to give write permission on the cmd.exe file at IUSR_NameServer user in a WebServer machine!!! (do you agree?)