When I start a new ASP.NET project in Visual Studio, I can create an ASP.NET Web Application or I can create an ASP.NET Web Site.
What is the difference between ASP.
Web Site = use when the website is created by graphic designers and the programmers only edit one or two pages
Web Application = use when the application is created by programmers and the graphic designers only edit one or two paged/images.
Web Sites can be worked on using any HTML tools without having to have developer studio, as project files don’t need to be updated, etc. Web applications are best when the team is mostly using developer studio and there is a high code content.
(Some coding errors are found in Web Applications at compile time that are not found in Web Sites until run time.)
Warning: I wrote this answer many years ago and have not used Asp.net since. I expect things have now moved on.