In earlier versions of IIS, all the web pages/sites on a given system ran in a single process. This meant that one application, if not written well could cause issues with other applications. An application could, for example, have a memory leak which would ultimately require a restart of IIS or even a reboot of the server.
In later versions of IIS, Microsoft adds the concept of web applications and application pools to IIS. With IIS, a web application is a set of one or more URLs (web pages) which you configure IIS to run inside independent worker processes. An application pool is a set of worker processes which IIS uses to run an application. You can run one or more applications within a given application pool. Technically a website and a web application are not the same, but in many cases, different websites end up being distinct...
