IIS has three level of isolation:-
LOW (IIS process):- In this main IIS, process, and ASP.NET application run in same process. So if any one crashes the other is also affected. Example let us say (well this is not possible) I have hosted yahoo, hotmail .amazon and goggle on a single PC. So all application and the IIS process runs on the same process. In case any website crashes, it affects everyone.
Medium (Pooled):- In Medium pooled scenario, the IIS, and web application run in different process. Therefore, in this case there are two processes process1 and process2. In process1, the IIS process is running and in process2, we have all Web application running.
High (Isolated):- In high isolated scenario every process is running is their own process. In below figure there are five processes and every one handling individual application. This consumes heavy memory but has highest reliability.
See following video on importance of session and viewstate: -
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