I've been burried in FPSE land lately and haven't had much time to play with ASP.NET Web applications in FrontPage, but I did spend some time, and I can tell you, my experience was not good.
Here's my setup. For whatever reason, my ISP doesn't have the server extensions configured so that I can edit my personal site directly in FrontPage, so I've set it up to FTP. I transferred all of the files for my personal site to the wwwroot folder on my local machine. Easy to do from inside FrontPage.
My thinking was that I would create my Web apps directly inside of my site so that I could use the FTP feature in FrontPage. In addition, by putting my site in the wwwroot folder, I could create my Web apps directly from within my Web site, edit them as needed from within FrontPage or work on them in VS, and FTP the whole lot when I'm finished.
Nope. Doesn't work.
When I tried to access the Web app folder, I received an error message that the folder did not exist in the current Web site even though I could plainly see it in the list of files and folders. So I attempted to open the ASPX page in FrontPage from the Windows Explorer and received another similar message. No matter what I did, I was not able to open the ASPX file in FrontPage unless I moved the ASPX page and supporting files into another folder within my site (sans all the hidden vti folders).
I talked to a FrontPage tester about why, and he said there was a KB article about FTP'ing ASP.NET Web apps from FrontPage, but he couldn't remember where it was, and I haven't been able to find it. (If someone knows where it is, please post it. I'm dying to read it!)
With the exception of creating simple Web apps and opening single files within FrontPage for designing, my experience has been less than ideal. I agree with Saurabh Nandu and the many people who have commented (either in feedback, newsgroups, or other blogs) that FrontPage integration with VS could be better, and although both FrontPage and VS are developed by Microsoft, they are technically competing apps, and IMHO FrontPage should compete as if it expects to do business and provide support based on user expectations and needs.
I haven't given up my quest for understanding how FP and VS SHOULD integrate. I strongly believe that a developer should be able to create ASPX pages in either FP or VS within a folder (in my case it was wwwroot, but this could be any folder that has IIS permissions) and manage all pages in a Web site from within FrontPage, whether they be HTML, ASP, ASPX, PHP, XML, XSLT, whatever.