Coordinate systems of GIS layers are managed differently in WMS depending on whether or not ArcObjects is enabled. If ArcObjects is not enabled then the standard WMS coordinate conversion option appears as one of the menus when right-clicking on the data layer in the Project Explorer. When ArcObjects is enabled then the standard ArcMap Map Properties dialog is used to define the coordinate system for display and mapping of GIS layers.
Related Topics:
Coordinate Conversions of Shapfile Layers
Map Properties of GIS Layers