Applications Pools under IIS6 - WHY to use rather than HOW to use?

I am coming at setting up Application pools from a network admin point of view, not a developers point of view.

I feel like I have a fairly firm grasp on how you setup an application pool, there are plenty of KB articles and tutorials out there that deal with that.

What I am not so crystal clear on is exactly when to use application pools. My basic understanding is that they will stop a badly behaving app killing your IIS server. You put apps that may misbehave in their own application pool, that way you can limit the amount of memory they use, control how often the IIS worker process for that application gets restarted, prevent it from taking up 100% of CPU usage etc.

So in a situation where you might have 60-100 sites on the same server, in a hosting situation, all running .net ASP stuff, should you create an application pool for each site? I assume that it would be a bad idea to do this, but I am not really sure why? I assume that if you do this that every application pool would suck up a little bit of memory to have the worker process even exist, so you would use up memory quicker than if you wouldn't?

I would assume that the way to do it would be to put any troublesome/high traffic/very complex sites in their own application pool, and then break the rest of the more vanilla sites up into shared pools?

If anyone can point me to a good site that explains WHEN to use application pools rather than HOW to use application pools, you would have my eternal gratitude, as well as my 500 points. Same goes for anyone who can give me a succinct rundown here.