Hi Dinesh,
The link between Ajax and Web Services is an important one for people that are working behind the firewall and integrating with business systems that are already using Web Services - by which I primarily mean
SOAP messaging rather than XMP-RPC or JSON based requests.
There are a few different options for integrating Ajax with SOAP based Web Services. There are browser specific solutions for dealing with SOAP messages in both Firefox and Internet Explorer, but the solution we recommend is the cross browser JavaScript SOAP toolkit from IBM. It makes dealing with SOAP fairly seamless.
Due to the same origin security policy of the web browser, XHR requests cannot be performed across domains. To get around this, script injection can be used to create mashups with services like Google Maps or JSONP and XMLP with either script injection or hidden IFrames can be used to access data across domains. The mashup approach is fairly safe. However, when you start requesting JSON or XML data across domains using script injection it can be a security problem since the HTTP headers of the web site user are sent along with any script request. To get around this, sites such as Google, will return any JSON data in comments such that it is not directly executable and can only be read by JavaScript that has requested it from the same domain using a proper XHR request.
I hope that helps!