500 Error when using custom account for application pool in IIS 7

The error code in your app log (0xc0000374) is a heap corruption error. You could debug this further with a crash dump, but that is kind of a pain. You mentioned you were using an ISAPI DLL, so I would look for an updated version of that DLL that specifically supports IIS7.

Update: The original question was for Windows Server 2008, but the solution is easier for Windows Server 2008 R2 and Windows Server 2012 (and Windows 7 and 8). You can add the user through the NTFS UI by typing it in directly. The name is in the format of IIS APPPOOL\{app pool name}. For example: IIS APPPOOL\DefaultAppPool.

IIS APPPOOL\{app pool name}

Note: Per comments below, there are two things to be aware of:

• Enter the string directly into the "Select User or Group" and not in the search field.
• In a domain environment you need to set the Location to your local computer first.

Reference to Microsoft Docs article: Application Pool Identities > Securing Resources

Original response: (for Windows Server 2008) This is a great feature, but as you mentioned it's not fully implemented yet. You can add the app pool identity from the command prompt with something like icacls, then you can manage it from the GUI. For example, run something like this from the command prompt:

icacls c:\inetpub\wwwroot /grant "IIS APPPOOL\DefaultAppPool":(OI)(CI)(RX)

Then, in Windows Explorer, go to the wwwroot folder and edit the security permissions. You will see what looks like a group (the group icon) called DefaultAppPool. You can now edit the permissions.

However, you don't need to use this at all. It's a bonus that you can use if you want. You can use the old way of creating a custom user per app pool and assigning the custom user to disk. That has full UI support.

This SID injection method is nice because it allows you to use a single user but fully isolate each site from each other without having to create unique users for each app pool. Pretty impressive, and it will be even better with UI support.

Note: If you are unable to find the application pool user, check to see if the Windows service called Application Host Helper Service is running. It's the service that maps application pool users to Windows accounts.