Webservice is an application which resides on server and 
used to share data and information. It provides Platform 
indpendent service, so any user with any operating system 
cant use it. it uses SOAP to transfer and receive data. It 
basically populates data in XML format which can be used by 
every one.

Webservice is provides informations which can be accessed 
remotely from other computers. Eg. CNN news(Service 
provider) publish weather information service which is used 
by Yahoo inc(Sevice client) using SOAP protocols thru HTTP.

Web services are a standardized way for one application to 
invoke a method of another application. These applications 
may reside on different computers that are some way 
connected, such as by a local area network or, more 
commonly, by the Internet. With Web services you have two 
actors, a client and a server. The server makes some set of 
methods available. These methods, when called, will perform 
some action and/or return some data. The client invokes one 
of the available methods of the server. Like methods in a 
class library, the methods of a Web service can accept an 
arbitrary number of input parameters, and can optionally 
return a result. The Web services standard spells out in 
great detail how a client can invoke a Web service method 
from a server. The standard dictates how input parameters 
and return values are passed from one computer to the 
other, how faults are handled, and a myriad of other 
complications.

WebServices is the Business Logic components which provide 
functionality via Internet using standard protocal such as 
HTTP.
websrvices use SOAP in order to expose the business 
functionality.