Application Pool configuration (IIS 7.0)
As is the case for IIS 6.0, it is recommended to create two separate application pools, one for the publication engine and one for the cms engine.
Add application pool
Open the Internet Information Services (IIS) Manager, select Application Pools and click Add Application Pool.
Just fill in a name (usually we use the same name as the site itself) and make sure the .NET Framework version is set to v2.0.50727 and the Managed pipeline mode is set to Integrated.
Repeat this step to create an application pool for the cms engine (suffix the name with Cms).
Advanced Settings
After creating the application pools, some settings should be changed. Select the first created application pool from the list and click Advanced Settings.
Set the Identity to NetworkService if it's not already set to this account. Set the Idle Time-out to 0, otherwise the worker process hosting Smartsite (either the publication engine or the cms engine) will be shutdown after being idle for the number of minutes specified.
Whether or not to change the Recycling setting Regular Time Interval is up to you. The default setting will recycle the worker process every 29 hours, so Smartsite needs to restart every 29 hours as well. To disable automatic recycling of the worker process, just set the value of Regular Time Interval to 0.
However, when you do not disable the automatic recycling of the worker process, you need to set the Disable Overlapped Recycle to true. Otherwise, IIS will spawn a new worker process while the previous one is still alive. Consequently, the Smartsite instance starting on the new worker process will fail to start due to a login failure when it tries to login on license feature 3, since the previous worker process still has an active login session for this feature (and usually only one session is allowed).
Use the same settings for the application pool for the cms engine. Since (re-)starting the cms engine takes a bit more time than (re-)starting the publication engine, it is adviced to disable the automatic recycling of the worker process for this application pool.