Thanks much for the beers! Most appreciated!
I think what happens is it just uses the default application pool and if the machine has .NET 1.1 on it there is a good chance that the default app pool is configured for 1.1.
.NET 1.1 can't share an app pool with other apps running 2.0 or up
.NET 2.0 and 3.5 apps can share the same app pool because 3.5 is really a superset of 2.0
.NET 4 can't share an app pool with any previous versions and in IIS 7.x when you install .NET 4 i creates 2 new app pools one for .NET 4 Integrated pipeline mode and one for Classic.
So the platform installer may not be smart enough to pick the correct app pool in all cases especially under Win 2003 because in older versions there is no convention for different named default app pools for different framework versions, so it has no way of knowing which app pool to use and just uses the default or creates a new one based on the default.
I do know that the platform installer can correctly set the app pool for 4.0 .NET on win 2008/IIS 7.x if the packages indicates .NET version 4 in the manifest.
If you install from the web app gallery that is using our 3.5 .NET package, but our codeplex download for .NET 4 can also be installed using the platform installer at least under IIS 7.x Win 2008, if you import the package from IIS, during the setup it prompts whether to use the .NET 4 application pool.
I no longer have any win 2003 machines so I'm not sure but I suspect the platform installer doesn't work as well there as on win 2008.