New Web Site vs. New Application Under the Default Web Site

Hello.

We have an ASP.NET web site/app and have always created a new application under the default web site.  We've had this ASP.NET site/app since the IIS6 days.  Our ASP.NET web site/app is an intranet only site, running on locally hosted/owned servers (just a single stand-alone server running Windows Server 2008 R2/IIS7.5 and SQL Server 2008 R2, which hosts and serves up our intranet site to internal users).  However, now that we're using IIS7.5 (and eventually IIS8), we're considering creating a new web site for our application.

So, what are the pros and cons of using a new web site vs. a new application under the default web site?

And, maybe more importantly, what is the recommended and/or standard practice - creating a new web site (with an application under it) or just creating a new application under the default web site?

Thanks in advance for the advice.