I think I understand business logic layer and data access layer, but what is meant by the term application layer? Is it something you use in distributed applications?
The part of the project which is unique for the actual application.
http://en.wikipedia.org/wiki/Application_Layer
In TCP/IP, the Application Layer contains all protocols and methods that fall into the realm of process-to-process communications via an Internet Protocol (IP) network using the Transport Layer protocols to establish underlying host-to-host connections.
In the OSI model, the definition of its Application Layer is narrower in scope, distinguishing explicitly additional functionality above the Transport Layer at two additional levels: Session Layer and Presentation Layer. OSI specifies strict modular separation of functionality at these layers and provides protocol implementations for each layer.
The common application layer services provide semantic conversion between associated application processes. Note: Examples of common application services of general interest include the virtual file, virtual terminal, and job transfer and manipulation protocols.
An Application layer is a more abstract defination that can be a combination of busines logic and database connection.
You can adapt a application layer within web applications that can be written to take advantage of COM+ services, Message Queuing, directory services, and security services.