Windows 2003 application event log error Could not create a Disk Cache Sub directory for the Application Pool

If you are receiving an error like this:

Event Type: Error

Event Source: Active Server Pages

Event Category: None

Event ID: 5

Date: 7/11/2010

Time: 7:07:24 PM

User: N/A

Computer: SV2360

Description:

Error: The Template Persistent Cache initialization failed for Application Pool ‘mydomain.com.au’ because of the following error: Could not create a Disk Cache Sub-directory for the Application Pool. The data may have additional error codes..

For more information, see Help and Support Center at http://go.microsoft.com/fwlink/events.asp.

Data:

0000: 05 00 00 00 –