Hi Satya
Web Application is very simply u can say the application which can run on Web.In other way the application which supports http protocol and can be accessed across geography.
Webservice is also a web application which specialized architecture in which application can communication over web irrespective of the underlying technology they have built upon, but they must support XML.
Suppose an application built in Microsoft technology can communication with application built in Java/J2EE tech.
Suppose a method add(first_name,last_name) is coded in .NET which can be published as a webservcie which transform this method in to XML format(WSDL) on the net call webservice provider. Then Java application can access this method add() by accessing that XML structure from the provider.
***Rewrd points if it helps u understand
Bluesky
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