Web servers serves the HTTP request and reutrns the HTTP response whereas application server exposes the business methods. These business methods are invoked thru different protocols e.g. Http, TCP/IP etc.

Application servers are typically J2EE-based, running EJBs or other Java components. Application servers are designed to create true applications with complex business logic, and have scalability features such as load balancing, fail-over, and process distribution. In other words, it's primarily a development environment.

Webserver hosts the images, html or any content related to the presentation.

 Nowdays, most of the servers e.g. weblogic, websphere etc. serves both the purposes.