Is there any difference between website and web application project? What if you are working on a project that is sort of hybrid of site and application? which project shoul
I'ld go the newer Web Application project (always, regardless of the size of the project).
There is nothing to lose and everything to gain with using the Web Application Project (you cannot say this about using the "website" only).
The official list of differences are here:
Use Web Application Projects when you
Use Websites if you:
@Mehrdad's link here is essential if you want to know more http://msdn.microsoft.com/en-us/library/aa730880(VS.80).aspx#wapp_topic5