How to disable or enable application isolation in Windows 8 and in Windows Server 2012

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Application isolation is a new printing feature in Windows 8 and in Windows Server 2012. This feature isolates applications from print drivers so that applications do not crash if a print driver crashes.
Application isolation makes every application that interacts with a printer driver more stable.

In Windows 8 or in Windows Server 2012, a printer driver that is running in isolation from applications may not have full functionality. For example, watermarks do not print correctly.