Product:
Cognos Controller 8.5

Symptom:
When you try to start Cognos Controller from the link in Cognos Connection you get an error inside Internet Explorer:

CGI Error
The specified CGI application misbehaved by not returning a complete set of HTTP headers.

Cause:
The virtual directory’s on the Controller Applications IIS is not correct setup.

Solution:
Go to Internet Information Service on the Controller Application server.
Delete the virtual directory Cognos8

Create a new Cognos8 virtual directory and all the underlying directories needed for Cognos Controller application.

Following virtual directories should be created under the default web site:
/Cognos8 – Read
\Cognos\c8\webcontent
/Cognos8/cgi-bin – Read, Run Scripts & Executables
\Cognos\c8\cgi-bin

/Cognos8/Controllerbin – Read, Run Scripts
\Cognos\c8\WebContent\ccr
/Cognos8/Controllerserver – Read, Run Scripts
\Cognos\c8\ControllerProxyServer
/Cognos8/Controllerhelp – Read
\Cognos\c8\webcontent
/Cognos8/Controller– Read, Run Scripts
\Cognos\c8\WebContent\ccr

(Then redirection virtual directory Controller to /cognos8/controllerbin/ccr.exe)

Restart the Controller Application server and try again.