Re: application instance and dialouge instance

Dialog instance and Application Server are generally used synonymously.

A SAP instance is basically an administrative unit providing one or more services. Check the below summary:

ABAP AS

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Dialog Instance = Instance where dispatcher run with other work processes like dialog, background, spool etc

Central Instance for AS ABAP = Message Server + Enqueue work process

Central Services Instance for AS ABAP (ASCS) = Message Server + Enqueue Server (when high availability is used)

http://help.sap.com/saphelp_nw04s/helpdata/EN/43/e6b0a0d7633886e10000000a1553ed/content.htm

Central System = Database + Central Instance

Java

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Dialog Instance = Java dispatcher (without SDM)

Central Instance for AS JAVA = SDM + Dialog Instance (Where SDM runs)

Central Services Instance for AS JAVA (SCS) = Message Server + Enqueue Service

Central System = Database + Central Instance + Central Services Instance

ASCS standard for ABAP SAP Central Services.

SCS standards for SAP Central services.

You can read following also.

http://help.sap.com/saphelp_nwpi711/helpdata/en/47/fe7aa040e23c8be10000000a42189c/content.htm

http://scn.sap.com/community/netweaver-administrator/blog/2012/05/22/whats-new-in-sap-netweaver-73--a-basis-perspective