It sounds like you have a Web Application. There are two ways you can implement a website in .net both 2.0 and 3.5. One is a Web Application, where all the code is compiled for the site before-hand and published to a location. The other is a Web Site. The Web Site is compiled whenever the app pool is recycled. The Web Site offers the freedom of only pushing a few files or pages, where a Web App needs to be fully compiled and the entire app pushed. The performance difference is not all that great between the two and honestly users wouldn't notice the difference unless your site is not hit that often and the idle worker process is recycled, which would cause the next user to have to wait a few extra seconds for it to compile. I work with Web Sites at the moment and our site is hit very often so the performance increase of a Web App is really negligible.
Here's a nice little article explaining the difference:
ASP.NET Website vs Web Application Project