The difference between an Isolated host and an In-Process host...

The difference between an Isolated host and an In-Process is that an Isolated host must run under another process,in most cases IIS,and an In-Process host is a complete BizTalk service alone.Additionally,since In-Process hosts exist outside of the BizTalk environment,the BizTalk Administration Tools are not able to determine the status of these hosts(stopped,started,or starting).

Security is also fundamentially different in an Isolated host versus an In-Process host. In-Process hosts must run under an account that is within the In-Process host’s Windows group, and do not maintain security context within the Messagebox. Isolated hosts are useful when a service already exists that will be receiving messages either by some proprietary means or by some other transport protocol such as HTTP. In this case, the Isolated host only runs one instance of the End Point Manager, and is responsible for receiving messages from its transport protocol and sending them to the Messagebox through the EPM. Outside of hosting an IIS
process, Isolated hosts could be used to attach to a custom Windows service that is polling a message store looking for new items that it will publish to the Messagebox. Isolated processes provide an architectural advantage for these scenarios. They do not require any interprocess
communication (IPC) between the EPM and the Windows service that hosts it. The only real IPC that exists is between the Isolated host and the Messagebox database, which cannot be avoided since . . . it is a database service, hosted most likely on another machine. In-Process hosts can host all BizTalk subservices depending on how they are configured.
They not only can receive messages from the outside world, but they can send them through
Send Adapters, poll for messages that match a subscription, and host XLANG engine instances.
In the case of a Send Adapter, an In-Process host must be used due to how the security context
of the Adapter Framework is built. You can get around this by creating a Send Adapter with
custom IPC. This technique is how the HTTP and SOAP adapters interact with the aspnet_wp.
exe/w3wp.exe processes within these respective adapters.