Since i moved my website to IIS 7 windows 2008 I was continuously getting below error message regarding my website application pool. I did some research and found out problem was related to ApplicationPoolIdentity permission to IIS Temporary Compressed Files.
The directory specified for caching compressed content C:\inetpub\temp\IIS Temporary Compressed Files\DefaultAppPool is invalid. Static compression is being disabled.
So I got the help from below link to fix this problem, thanks to scott
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