OBA detailled design: expose BDC entities as web services and consume on Office client
The Business Data Catalog (BDC - a feature of the Microsoft Office SharePoint Server 2007 Enterprise Edition MOSS2007) plays a crucial role in the OBA architecture pattern: it exposes the data of LOB applications as business entities.
Those business entities can be directly consumed by for example MOSS2007 web parts BUT those business entities can also be exposed as web services and consumed by MS Office client applications (via custom task pane / smart tags).
The business value of the latter solution is that end users can easily access data from LOB applications from their familiar MS Office client applications which represent important productivity gains (which is the primary goal in life of OBA applications).
Check out the detailled how to's in this MSDN article (by Scot Hillier, Microsoft MVP and Bhushan Nene, Microsoft Corporation Architect).