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.
It depends on what you are developing.
A content-oriented website will have its content changing frequently and a Website is better for that.
An application tends to have its data stored in a database and its pages and code change rarely. In this case it's better to have a Web application where deployment of assemblies is much more controlled and has better support for unit testing.