How to beta-test a web site? (about subfolders)

I've got my live web site hosted at discountasp.net. When I build a new version of the web site, I want to test it and make sure it works before replacing my live site. First I make sure it works on my local development machine. Then assuming all goes well, I create a new folder that is a subdirectory of the root folder of my live website on discountasp.net, call it "Beta", use the "Install Application" button in the "Web Application" discountasp.net control panel to perform some magic on it that I don't understand, and then upload my beta site to that folder. I then test my application at www.mylivewebsite.com/beta. If it works OK I move it to the root folder.

This doesn't seem to work anymore. I've tried putting a bare-bones do-nothing web site in the "Beta" folder and errors happen. I sometimes end up seeing the custom error page defined in the root-level web.config file. That seemed weird to me because I thought my "Beta" folder/application was totally isolated/independent of my root. But it looks like the root-level web.config is somehow affecting the sub-folder. Does that sound correct?

What is a good approach for beta-testing web sites on discountasp.net?

What does the "Install Application" button do?

Can I have multiple totally-independent web sites? I understand that they'll need different root paths, like "mylivesite.com/admin", "mylivesite.com/beta", etc.