Application Settings are different from user setting since configuration values of application settings apply to the entire application. Normally, we will store database connection strings, web services URL, Remoting settings. There are many benefits of employing application settings. For instance, we can add or update Assemblies location without need to recompile project. This is also good way of spreading assemblies to different machines to accommodate heavier load for example when hardware upgrade is not an option.
We can host assemblies in the IIS but we need to make sure file names are ending with .rem