IIS 7 recommends using ApplicationPoolIdentities for its application pools. This is instead of using NetworkService. One advantage of this is looking at Processes in Task Manger, the IIS Worker process has the username matching the application pool name and thus it is easier to see which is consuming more resources etc.
BUT, if you switch to ApplicationPoolIdentity as the Identity you might come across the following error:
[SecurityException: Request for the permission of type ‘System.Web.AspNetHostingPermission, System, Version=220.127.116.11, Culture=neutral, PublicKeyToken=b77a5c561934e089’ failed.]
To fix this, in advance settings for the application pool change load user profile to true.
For more information on ApplicationPoolIdentity see [http://learn.iis.net/page.aspx/624/application-pool- identities/](http://learn.iis.net/page.aspx/624/application-pool- identities/)