Notes on Application Designer in VSTS
You can have only one application diagram in your solution because it describes the overall structure of the solution in terms of interconnected applications. However, a solution can have multiple system, deployment, and logical datacenter diagrams.
Some of the Microsoft-provided application types support a full round-tripping experience with code—notably ASP.NET applications and Windows applications. That is, changes made to code are reflected in the designers, while changes made in the designer are reflected in code.
The ASP.NETWebService prototype is in effect an ASP.NETWebApplication prototype that has the Web content endpoint removed and a Web service endpoint added for your convenience.
Applications communicate through endpoints, and for two applications to be connected together, there must be a provider endpoint at one end of the connection and a consumer endpoint at the other end.
Adopted from Tony Loton's article Introduction to the Visual Studio 2005 Application Designer, Part 1