site? or virtual directory

can someone explain the difference between a new site in IIS and a new virtual directory.. which should i use, when and why?
Thanksregular sites in IIS are directories that reside under the inetpub/wwwroot directory. Virtual sites can be pointed anywhere. also Virtual sites have setup options that the other does not like setting up some permissions stuff. you should use virtual d's
Also a site, generally speaking, has to be tied to an IP address, and a virtual directory is more of a subfolder or subweb of an existing site.
A site is the default website on a standard IIS setup which is usually the wwwroot folder. Virtual directories are locations on your machine which you are indicating to IIS should be processed by IIS as a web application - which is what is needed for asp, asp.net and other server side scripted pages to be properly handled. On a standard machine like my home pc for example I only have one site. As has been said you need different IPs etc. to create more sites. You default site is a web application folder naturally.
They are nearly the same in terms of features and options. You can set any security on a site that you can on a vdir. And a Site does not have to reside in the wwwroot folder. You can specify any folder as long as you ensure that the IUSR_machinename user (or whatever user your anonymous accesses are impersonating) has permissions to it. Also, with sites, you can specify a host header that IIS can use to direct traffic on the same IP to different sites based on the url used to access the IP.

VDirs are amply explained above by Musician..