What is the difference between Basis and the Application Server?

I have one question about the SAP R/3 architecture: What distinguishes BASIS from the Application Server? What is the role of Basis doing vs. the role of an Application Server? How are these two linked & finally are ABAP/4 programs interpreted or compiled or both? Please give me an insight into this.

Basis is part of the application server. But, think of Basis as the foundation of the SAP system. "Basis" has to do with the installation and configuration of components that make the system work. About the ABAP/4 language: programs are compiled to a program code that runs interpretively. The compilation process is referred as "generation".