What is Application Pools in Windows 2003

An application pool is a configuration that links one or more
applications to a set of one or more worker processes. Because applications in
an application pool are separated from other applications by worker process
boundaries, an application in one application pool is not affected by problems
caused by applications in other application pools.

By creating new application pools and assigning Web sites and applications to them, you can make your server more efficient and reliable, as well as making your other applications always available, even when the worker process serving the new application pool has problems.