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I want to know the max number of web applications that can be created on SharePoint WFE. Is there any limit or does it depend on hardware?

Also, does it depends on IIS version?

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Number of Application Pools per web server Supported are 10. Limit depends on RAM allocated to web servers and workload of the farm (user base and usage characteristics – a single highly active application pool can reach 10GB or more)

http://www.sharepointsharon.com/2011/08/sharepoint-2010-performance-and-capacity-limits/

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Assuming that you assign separate Application Pool to each Web application, The recommended limit is 10. Yes, it depends on the server hardware.

Regarding IIS, anyway you will be using IIS 7.x for SharePoint 2010.

For details, see here : http://technet.microsoft.com/en-us/library/cc262787.aspx#Boundaries

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