A domain is the basic administration unit for WebLogic 
Server instances.A domain consists of one or more WebLogic 
Server instances (and their associated resources) that you 
manage with a single Administration Server.We deploy the 
application in domain.Each domain's configuration is stored 
in a separate configuration file called config.xml, which 
is stored on the Administration Server along with other 
files such as logs and security files. When you use the 
Administration Server to perform a configuration task, the 
changes you make apply only to the domain managed by that 
Administration Server.

Almost all of the above information is correct as provided
in the 'E-Docs' of BEA. But in 'Weblogic 8.1' I proved that
more than Admin Server can exist for a domain and further a
domain can contain multiple Sub Domains. I have a doc.
explaining the procedure to do it.........

Do we deploy Application in Domain ? I guess we deploy it 
in Managed instances