I am bit confused. Is there only one application domain for every single ASP.NET Web Application or there can be anywhere between 1 to 100 application domains present in a single application pool of a web application
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An Application Domain is the logical and physical boundary created around every .NET application by the Common Language Runtime (CLR).
Most times though, the relationship between a web application and an application domain is one-to-one.
You may read the following article (very short, but nicely written) which explains what are Application Domains and how they may be useful: http://www.beansoftware.com/NET-Tutorials/Application-Domain.aspx.
Also, on his blog, Scott Forsyth explains the differences between an application (IIS term), a web application (ASP.NET term) and application domains.