CoDe Magazine - Article: Compilation and Deployment in ASP.NET 2.0

By default, ASP.NET compiles pages and controls on a per-directory level. The compiler takes all pages, controls, and master pages of a given language (C# or Visual Basic .NET) in a directory and compiles them into a single assembly that contains everything that the page or control requires. If you have multiple directories you will have one assembly for each. By default each directory compiles into a separate assembly, but the compiler can also create one assembly per page/control. When running Visual Studio you can use directory-level compilation and every time you make a change in a page or control, the directory-level assembly recompiles. If you make a change in any files in the APP_CODE folder, the APP_CODE assembly also recompiles.