IIS - Associating .NET Framework with IIS and Application Pool. What's the difference?

I'm trying to get a handle on IIS.  I've noticed that I can associate different versions of the .NET Framework with IIS as a whole (Image 1).  I've also noticed I can associate different versions if the .NET Framework with each Application Pool (Image 2).  What role does each .NET Framework association play?  In other words, if I associate IIS with the .NET Framework v2.0.5 should I associate the Application Pools with v2.0.5 as well?
IIS-NET-Framework.jpg
App-Pool-NET-Framework.jpg
jdanaAsked:
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whityumConnect With a Mentor Commented:
the iis setting is the default, the application pool setting can be per web site or group of web sites.  E.g. we run 2.0 and 4.0 on some of our servers if they are shared or test servers and the projects were developed at different times.  You cannot run 2 sites in the same app pool if they are different versions of .net.
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whityumConnect With a Mentor Commented:
app pools default to the IIS setting
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