It operates on the whole IIS process tree, as opposed to just your application pools.
C:\>iisreset /?
IISRESET.EXE (c) Microsoft Corp. 1998-1999
Usage:
iisreset [computername]
/RESTART Stop and then restart all Internet services.
/START Start all Internet services.
/STOP Stop all Internet services.
/REBOOT Reboot the computer.
/REBOOTONERROR Reboot the computer if an error occurs when starting,
stopping, or restarting Internet services.
/NOFORCE Do not forcefully terminate Internet services if
attempting to stop them gracefully fails.
/TIMEOUT:val Specify the timeout value ( in seconds ) to wait for
a successful stop of Internet services. On expiration
of this timeout the computer can be rebooted if
the /REBOOTONERROR parameter is specified.
The default value is 20s for restart, 60s for stop,
and 0s for reboot.
/STATUS Display the status of all Internet services.
/ENABLE Enable restarting of Internet Services
on the local system.
/DISABLE Disable restarting of Internet Services
on the local system.