On my local machine, I work on multiple web sites and run them under IIS under a \"Default\" web site. That way I can access the sites through this type of URL: http://localhos
You can solve this by running the apps as Virtual Directories, they will then get separated processes in the application pool or you can have one for each app, still you directories etc will still be accessed the same way.
Read more here: http://learn.iis.net/page.aspx/150/understanding-sites-applications-and-virtual-directories-on-iis-7/
I think you will need a web.config file in the root directory even if its more or less empty and set the allowSubDirConfig to true.