hi,
Web Server serves static HTML pages (or gifs, jpegs, etc.), and can also run code written in CGI,
JSP etc. A Web server handles the HTTP protocol. Eg of some web server are IIS or apache
An Application Server is used to run business logic or dynamically generated presentation code. It can either be .NET based or
J2EE based (BEA WebLogic Server, IBM WebSphere,
JBoss).
A J2EE application server runs
servlets and JSPs (infact a part of the app server called web container is responsible for running servlets and JSPs) that are used to create HTML pages dynamically. In addition, J2EE application server can run EJBs - which are used to execute business logic.
An Application server has a 'built-in' web server, in addition to that it supports other modules or features like e-business integration, independent management and security module, portlets etc.
See this link from
java world -
http://www.javaworld.com/javaqa/2002-08/01-qa-0823-appvswebserver.html