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Server and domain isolation make it possible to create a layer of security to achieve logical isolation of the network traffic that moves between computers or networks. If an attacker manages to gain physical access to a company’s internal network and attempts to access a server that contains valued data assets, server and domain isolation can block access simply because the computer that the attacker is using is not a trusted company device, even if the attacker used a valid user account and password.

The logical isolation approach using server and domain isolation techniques enables the development of a flexible, scalable, and manageable isolation solution that provides the security of isolation without the cost or inflexibility of physical boundaries.

http://www.microsoft.com/technet/security/guidance/architectureanddesign/ipsec/ipsecch1.mspx