I commonly get the question - sooo...wtf is a web service?  A web service is anything which requires two or more computers to communicate.  Most web services these days are designed with a single "Server" providing data to any "Clients" which ask.  This conversation happens in accordance with a previously agreed upon langage.  A breif list of pieces:

Database (SQL Server) - stores data.  You can put data in.  Take data out.

Middle Tier (ASP.NET) - the programing brains of the web service.  This layer receives data from the browser (user input) and sends data to the browser (XAML/JavaScript/HTML). 

Browser (Internet Explorer) - primarily interprets the formatting from HTML and renders the page.  The browser also can get functionaltiy added by attaching plug-ins (ie Silverlight, Javascript VM, Flash).

XAML - The language to define graphics, animations, and interactivity using the Microsoft Silverlight plug-in. 

JavaScript - a programming language which runs on your browser.  The program is embedded in the downloaded web page.  Then, when you activate a method by, say clicking on a button, the method is called from within your browser.  A Javascript method can call methods in the server as well (ie ASP.NET) and transfer data between the client and the server.  Often XML (structured human readable data) is used to format these data transfers.  This combination is known as AJAX - Asynchronous Javascript and XML

HTML - A language which instructs the browser how to render the web site content (images, links, text etc)

CSS - an HTML page can reference a CSS sheet which defines a set of style guidelines (title fonts, body text fonts, margin sizes etc) to maintain uniformity across all the pages in a website.