An Internet Information Services (IIS) application pool is a grouping of URLs that is routed to one or more worker processes. Because application pools define a set of Web applications that share one or more worker processes, they provide a convenient way to administer a set of Web sites and applications and their corresponding worker processes. Process boundaries separate each worker process; therefore, a Web site or application in one application pool will not be affected by application problems in other application pools. Application pools significantly increase both the reliability and manageability of a Web infrastructure.

The application pool element contains configuration settings for all application pools running on your Internet Information Services (IIS) 7 server. An application pool defines a group of one or more worker processes, configured with common settings that serve requests to one or more applications that are assigned to that application pool. Because application pools allow a set of Web applications to share one or more similarly configured worker processes, they provide a convenient way to isolate a set of Web applications from other Web applications on the server computer. Process boundaries separate each worker process; therefore, application problems in one application pool do not affect Web sites or applications in other application pools. Application pools significantly increase both the reliability and manageability of your Web infrastructure.

DNN Application Pool




Integrated
mode allows DNN to process requests in the application pool by using the DNN 7 integrated pipeline. This allows ASP.NET modules to participate in IIS request processing regardless of the type of resource requested. Using integrated mode makes available features of the ASP.NET 2.0 request pipeline available to requests for static content, as well as ASP, PHP and other content types. By default, DNN application pools run in this mode.

Classic mode uses the DNN 6.0 processing pipeline for hosting ASP.NET applications. In this mode, requests are processed initially through DNN 7 modules, and ASP.NET requests are further processed by the aspnet_isapi.dll. The ASP.NET processing pipeline is separate from the DNN 7 processing pipeline, and the ASP.NET request processing pipeline features are not available to other resource types. This also means that an ASP.NET request must pass through authentication and authorization modules in both process models. While this is not as efficient as integrated mode, it does allow you to run applications developed using ASP.NET version 1.1 on an DNN 7 server without modifying the application to run in integrated mode. There are a few things to keep in mind while running same installation in different application pools Stale cache. Since each app pool gets its own cache bucket you could get stale data in portals running different application pools. Unless you use a multi process aware caching provider like Web request Caching Provider available in DNN professional .App restarts initiated by DNN will cause all app pools to restart. DNN initiates an app restart by touching the web.config file. 

One of the big advantages of running each application in individual pools is so that fault in one pool does not affect other. So to answer your question, if you have two sites configured in IIS to use separate application pools, then one will not affect other.