Hi, I think you can actually do this, you just need to specify the right include path, here is a sample
<ItemGroup>
Mike
<ItemGroup>
<Application1 Include="/vd1/app1">
<PhysicalPath>C:\photos</PhysicalPath>
<AppPool>NewAppPool100</AppPool>
</Application1>
</ItemGroup>
<MSBuild.ExtensionPack.Web.Iis7Website TaskAction="AddApplication" Name="NewSite" Applications="@(Application1)"/>
vd1 in this case is the path of a virtual directory I have in the websiteMike