Hosting multiple websites on IIS: website vs Application vs Virtual directory

I need to host two different asp.net web applications on a new web server. Previously, they were hosted on IIS 6  and were added as a virtual directory each under the Default Website.

Now I am in IIS 7 and need to host those two web applications. If I right-click Default Website and add the two web applications as new Virtual directory or new Application, I can access them as

http://MyWebServer/WebApp1
http://MyWebServer/WebApp2

Which is OK and easy.

But if I right click on "Sites" -> Add Website to add the two applications as Websites, do I have to give them two different hostnames to distinguish? I would like to access the two applications like above mentioned links so the end-users are not confused. I am not sure how their URL's will be if I add them as WebSites.

Can you please give me the advantages of adding as WebSites over Virtual Directory or Application?
If it does not effect performance or speed, I would like to add the web applications as Virtual Directory or Applications. Please advise.
Angel02Asked:
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Paul MacDonaldConnect With a Mentor Director, Information SystemsCommented:
"But if I right click on "Sites" -> Add Website to add the two applications as Websites, do I have to give them two different hostnames to distinguish?"
You never HAVE to give a web site a DNS name, but you do have to give them a unique IP/port combination.

"I would like to access the two applications like above mentioned links so the end-users are not confused."
Then stick with your virtual directories.
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Angel02Author Commented:
Should I add them as Applications or Virtual Directories?
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Paul MacDonaldDirector, Information SystemsCommented:
Virtual Directories.
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Angel02Author Commented:
If I add as Virtual Directories, they will use the application pool, asp.net version and default document assigned to the default website, correct?

If the default document is different for both my web applications, should I add them as Applciations instead of Virtual directories? Are there any advantages of adding as virtual directory?
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Paul MacDonaldConnect With a Mentor Director, Information SystemsCommented:
As Virtual Directories, they'll use whatever AppPool and .Net version you assign to them.  If you don't change anything, they'll use the default values.

Are there any advantages of adding as virtual directory?
Based on your objective (http://MyWebServer/WebApp1; http://MyWebServer/WebApp2) Virtual Directories are the only way to go.
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Angel02Author Commented:
If there are no objective to worry about  (like http://mywebserver/WebApp1;http://mywebserver/WebApp2), is there an advantage of adding as websites over adding as virtual directories?
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Paul MacDonaldDirector, Information SystemsCommented:
As individual web sites, they can be accessed by their own DNS names (www.website1.com, www.website2.com) versus being accessed at a common URL (www.website.com/VD1, www.website.com/VD2).
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